Finance Minister P. Chidambaram Tuesday said the government would continue its efforts to keep the inflation rate under check to put the economy on a higher trajectory of growth.

Chidambaram admitted that there was pressure on the inflation rate due to excessive money supply into the market and sharply higher global crude oil prices.

"It is our intention to keep inflation under control and the interest rate benign to encourage investments," Chidambaram told a business meet organised here by the Bombay Chambers of Commerce and Industry.

On the reasons behind the surging inflation, he said: "There is a huge inflow of foreign exchange. Oil prices and the temptation of the manufacturing sector to raise prices add to this."

The country's economic growth would be robust in the current fiscal year if the interest rate is benign, inflation is low and borrowing by the government is lower than in previous years, he noted.

The Reserve Bank of India (RBI) had last month said the economy would expand at the rate of seven percent in the current fiscal on increased output in agriculture and key industrial sectors.

Spiralling crude oil prices might, however, put roadblocks in the way of achieving higher gross domestic product (GDP) in fiscal 2005-06, said the central bank.

India's economy grew by 6.9 percent in the fiscal year ended March 31, 2005 on top of a higher increase of 8.5 percent in the previous year on increased agriculture production.

Chidambaram told industry leaders the government's borrowings in the current fiscal year ending March 31, 2006 are likely to be lower than the earlier estimates of $32 billion.

"We will borrow less in the current fiscal year on account of better cash flow management," he said, noting the current year had started with good cash reserves.