Inflation rate reached a 13 year high of 11.05 per cent for the week ended 7 June.
Addressing the media here, Nath added that inflation rate is likely to increase in the range of 0.3 to 0.4 percentage points in the coming weeks. "However, it will come down after that," he added.
Dispelling fears of a slowdown in the Indian economy, Nath said India continues to be on the growth path. "Industrial production growth in April was seven per cent. FDI inflows in the same month rose by 127 per cent to $ 3.7 billion over the same month of the previous year. Manufacturing sector received 53 per cent of FDI. I want to dispel any fears about a slowdown in the economy," he added.
According to Nath, Industrial Production growth in the financial year 2008-09 is likely to be in the range of 8 to 9 per cent. "Exports are also strong and we will achieve he target of $ 200 billion on 2008-09,".
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However, he ruled out any more bans on exports as a measure to contain inflation. "What more is there to be banned? This is a imported inflation as we have to import 80 per cent of our crude oil requirement and 50 per cent of edible oil needs. Prices of these commodities have been increasing at a rapid pace", Nath said.
Adding on, the Commerce Minister maintained that high interest rates will not have a big impact on the industry and business. "The cost of manufacturing goes up but it leads to better financial management and efficiencies. High interest rates does not mean low credit the measures announced by RBI will lead to burning of the excess fat in the economy," added Nath.