It's been long that Indian policy makers have been struggling with soaring inflation levels and there does exist a cold economy. And now with the extending shadow of a debt crisis in Europe, it has become a much bigger cause of concern for India; as told by Finance Minister Pranab Mukherjee on Tuesday.

There seems to be growing fears of a possible Greek debt evasion due to which Europe's banking sector will shake all the global markets and this is something really worrying for the domestic concerns of Indian market as well.

On Wednesday, the final August inflation reports will be out in India and based upon this, the central bank will decide whether to raise the rates on Friday or not.

In July, there was a prevailing inflation of around 9.22% in India, and in order to break this, the Reserve Bank of India in last 15 months has raised the rates by more than 11 times.

During an interview to CNBC-TV18, it has been told by Partho Mukherjee, the President of Treasury & International Banking, that the situation in Europe and Greece could have a big impact over all the currencies including rupee. And with any kind of drastic happenings in Greece, rupee would be mostly affected. It will become highly unstable and weak.