India's finance minister warned on Wednesday that economic growth will probably miss the government's nine percent target as rising commodity prices, especially oil, and stubborn inflation slow activity.

Finance Minister Pranab Mukherjee's statement came after India's central bank last week lowered its growth projection to eight percent, citing measures taken to tackle inflation running at around nine percent.

"Due to volatility in international commodity prices and other supply constraints, it may not be possible to achieve the growth rate of nine percent for the current financial year," Mukherjee said in a speech in New Delhi.

Mukherjee gave no projection for growth for the fiscal year to March 2012 but he had said earlier this month in Hanoi that expansion could slow to eight percent from an estimated 8.6 percent in the last fiscal year.

He added one of India's major challenges was to "achieve sustained growth at the rate of nine to 10 percent with fiscal prudence and moderate inflation."

Controlling prices is an overriding priority for Prime Minister Manmohan Singh's Congress-led government, with poorer households -- the backbone of the Congress party's support -- especially hard-hit by rising food and fuel costs.

At the same time, the government says it needs double-digit economic growth to overcome crushing poverty in the nation of 1.2 billion people.

High growth was essential to fund social projects such as the proposed Right to Food Act to feed India's poverty-stricken millions, Mukherjee said.

Last week, the central bank said short-term economic growth might have to be sacrificed in the fight against inflation as it hiked interest rates for the ninth time in 15 months, by a bigger-than-expected 50 basis points.

Mukherjee estimated India's inflation, which has been uncomfortably high for more than a year, should ease to between seven and 7.5 percent this fiscal year.

channelnewsasia.com