The Reserve bank of India is expected to announce new monetary policy on Thursday. It can take various fiscal measures to curb inflation rate. Though international prices of crude oil are decreasing, the rate of inflation is not showing positive signs. The inflation rate in India is 11.89 percent at present, which is far away from the RBI’s forecast of 5-5.5 percent by the end of the year.

The central bank can increase the lending rates to tame inflation. The bank can hike cash reserve ratio and rapo rate by .25 percent. Rapo rate is a rate at which RBI lends to other banks and CRR is the portion of money the banks required to remain with central bank.

Most of the banks and industrialists don’t want RBI to hike the lending rate which is already high for market. The chairman of Godrej group, Adi Godej expected RBI to think from market point of view and completely revise its policy. HDFC Bank's Managing Director Keki Mistry and IDBI Chairman, Yogesh Agarawal also expressed displeasure on the idea of increasing interest rates by apex bank. They said that the hike in interest rates is not in the favor of industry and it can adversely hit the corporate sector.

RBI has already increased CRR 13 times since December 2006. RBI has increased CRR by 1.25 percentage point leading to an evacuation of over Rs 47,500 crore from the system.