RBI to take necessary action to ensure sustained inflation, says Raghuram Rajan

Mumbai: "The RBI will act as necessary to ensure sustained inflation," said Rajan, who has often surprised with hawkish, anti-inflationary policies. On growth, he said the central estimate of 5.5 per cent GDP growth for 2014-15 can be sustained and added that prospects for growth have "improved modestly". "Sentiment on domestic economic activity appears to be reviving," Rajan said. Inflation measured by consumer prices cooled down to a 43-month low of 7.31 per cent for June, while the factory output came in at 4.7 per cent in May, the highest in the last 9 months. Factors like these had led to expectations of Rajan holding the key rates at the policy review. The next review of the policy will be on September 30, he said.