Finance Minister Pranab Mukherjee announced that the measures taken by the central banking institution to cool inflationary pressures were compatible with administration plans and were destined to forward a sturdy indication that inflation has to be embarked upon.

The central bank lifted up key policy rates and increased its March-end inflation estimation to 7% as against 5.5% and admonished that there could be a possible spillover of high food costs to a generalized price increases.

Pranab Mukherjee said, "These steps the RBI had to take to give a strong signal to tackle the inflationary pressure which is in the system. On the one hand we will have to control inflation and strong signal should be given."

The minister said that the supply management has to be harnessed and supply blockages have to be removed.

Officials had previously said that inflation would settle in the 6% to 6.5 % range.

"I am worried at the food inflation. It cannot be accepted that food inflation would be this high," the finmin said.