MUMBAI: The new Reserve Bank of India (RBI) Gov. D. Subbarao yesterday said that his top priority would be to tackle rising inflation, and that financial reform were also on his agenda.

Speaking after taking over the reins of RBI as 22nd governor, Subbarao said, “It would be my immediate concern to manage inflation and anchor inflationary expectations.” The statement assumes importance in wake of double digit inflation despite a slew of measures taken both by the RBI and the Finance Ministry to tame it. Subbarao also said that his short to medium term objective would be to usher in financial sector reforms keeping in view financial stability, price stability and real sector reforms.

Praising the outgoing RBI Gov. Y.V. Reddy for excellent work during his term, Subbarao said “Reddy led the institution with dignity, distinction and intellectual integrity.” Subbarao would be in charge for a period of three years.

Analysts said they expected Subbarao to pursue the same hawkish policy against inflation as Reddy. “The hawkish policy stance will continue,” said D.K. Joshi, economist with credit rating agency Crisil.

The Reserve Bank of India meets to review mid-term monetary policy on October 24. “The new RBI governor likely carries a strong tightening bias, according to his recent comments on inflation and interest rates,” said Sherman Chan, economist at Moody’s subsidiary Economy.com.

Subbarao comes to the bank from the Ministry of Finance, where he was Finance Secretary. He also has done stints on the Prime Minister’s Economic Advisory Council and as a lead economist at the World Bank. He has a master’s degree in economics from Ohio State University.

Earlier, Prime Minister Manmohan Singh said India’s economy will grow 9 percent a year, but the fight against inflation, which is hovering near 13-year highs, will require increased production in agriculture, services, and manufacturing. “To ensure that this growth process is not inflationary, we must step up productivity and increase output,” Singh said, speaking at a steel plant in Tamil Nadu, an industrial hub.

India’s economic growth skidded to 7.9 percent in the April-June quarter, down from 9.2 percent in the same period last year, amid a slump in manufacturing. Growth has averaged 8.8 percent over the past five years.

Inflation has moderated over the last two weeks, but Indian policy-makers — like many across Asia — are struggling to battle rising prices, which they say have largely been imported in the form of high fuel and commodities costs.

India’s benchmark wholesale price index gained 12.34 percent in the week ended Aug. 23, slightly lower than the prior week, the government said Thursday. This time last year, annual inflation was just 3.94 percent.

— With input from agencies