Mumbai, Jun 3 (KNN) The Reserve Bank of India (RBI) governor Raghuram Rajan said monsoon is one biggest factor being considered by the bank in forecasting the future growth trajectory of inflation and the country's growth.

On the occasion of the bi-monthly monetary policy review on Tuesday, Rajan said the deficient monsoon will have an impact on the rural economy, food inflation, rural consumption, and production of food commodities such as oil seeds and pulses.

He also informed that the central bank will keep an eye out on how the monsoon progresses and the steps taken by the government to mitigate its negative effects.

"There had been El Nino in the past as well. Like the deficient rainfall in 2002-03, but the prices were stable and kept under control due to the government's steps," Rajan said.

There are ways in which the government can step in like creating buffer stocks or imports of commodities such as pulses, he added.

The inflation level for January, 2016 has also been hiked to six percent from an earlier estimate of 5.8 percent.

“For the kharif season, the outlook is clouded by the first estimates of the India Meteorological Department (IMD), predicting that the southwest monsoon will be 7 percent below the long period average. This has been exacerbated by the confirmation of the onset of El Nino by the Australian Bureau of Meteorology,” he said.

Rajan added that inflation control will also be helped by limiting the increase in agricultural support prices. (KNN Bureau)