Finance Minister Pranab Mukherjee says, the government is not sitting idle on reforms and indicated a cut in interest rates by the RBI, in its review of Monitory policy tomorrow, to arrest the slowdown in Economic growth.

Addressing an Assocham conference in Mumbai yesterday, Mr Mukherjee said, the government is taking steps to address concerns expressed by global agencies like Standard & Poor's and the industry.

Indicating that the RBI too will be joining the government in dealing with the slowdown, he said he is confident that keeping in view all the factors, the RBI will adjust the monetary policy as the government is adjusting fiscal policy.

Mr Mukherjee listed the growing burden of petroleum subsidy as one of the difficult areas before the Centre for which he appealed to the states to reduce their taxes. He said he has written to the states that the Centre will also respond but it has to be balanced because if federal finance becomes weak, nobody will be able to bailout the Indian economy.