India not out of woods totally:FinMin on inflation

New Delhi: Indian Finance Minister Pranab Mukherjee says though food inflation has moderated the country is not out of the "woods totally", asserting inflationary pressures must be brought down to a tolerable and acceptable level before Indian economy can revert to high growth.

"In the last 20-22 months food inflation has been obstinate. Food inflation reached as high as 22 per cent in February 2010. From December onwards the pressure has started moderating but I would have to say that we have not come out of the woods totally," Mukherjee said in an interview to a TV channel tonight.

"It (inflation) must be brought to tolerable and acceptable level. It is a difficult job, but that is the job of the Finance Minister and the Government of India today," he said. According to Mukherjee, high inflationary pressure is affecting India`s growth rate, which is expected to be only 7 per cent this year. "In the first two quarters our GDP growth is 7.3 per cent. I do not think that in the remaining quarters there would be any substantial improvement. Perhaps we may have to settle down with GDP growth of 7 per cent," he said.

On the outlook for the near future, he said: "Given the Eurozone problems, the overall scenario is not very encouraging…If a credible package for the Eurozone is worked out and if the US economy stablises, then in the next couple of years we must be able to come back on the path of high growth trajectory." "This year will be difficult and the first few months of the next year will be equally be difficult," he added.