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With inflation falling, there is a need to give a push to growth, Economic Affairs Secretary Arvind Mayaram today said.
"The softening in the inflation is basically something that both the RBI and government have been anticipating and there is a need obviously now to push for growth.
"We need to create virtuous cycle where as inflation goes down, growth must go up. And for that whatever is required to be done, ought to be done," he told reporters here.
A moderation in vegetable prices helped to pull down inflation to a five-month low of 6.16% in December, raising hopes of a rate cut by the Reserve Bank later this month to boost sagging growth.
December retail inflation also fell to three-month low of 9.87%.
Industry chambers have pitched for lower interest rates to prop up growth. Industrial output in November contracted 2.1%, the worst performance in six months.
The Reserve Bank of India (RBI) is scheduled to unveil the third quarter review of monetary policy on January 28.
In the mid-quarter review of monetary policy on December 18, RBI had left key policy rates unchanged but said it will hike interest rates if inflation does not subside in line with the expected declining trend.
RBI had kept short-term lending rate unchanged at 7.75%, while the cash reserve ratio (CRR) remained at 4%.
India's economic growth has slipped to decade low of 5% in 2012-13 and in the current fiscal it estimated to be around the same level.
