"We are fighting against inflation...increase in repo and reverse repo by the RBI yesterday conveys a strong signal... (but) we shall have to keep in mind that year-end inflation may not be less than 6-7 per cent," Mukherjee told reporters here.
The RBI on Tuesday gave a rude shock to the industry, market and borrowers by increasing sharply, the key interest rate by 50 basis points.
Expressing concern over 9.44 per cent headline inflation in June, he said, "though food inflation has softened as compared to 22 per cent in February 2010, "still 8 per cent food inflation is not acceptable".
While accepting that there are challenges before the Indian economy arising out of domestic and global factors, the Finance Minister said, he did not believe in despondency.
"...when going gets tough, tough gets going. I do not believe in despondency. Difficulties have to be overcome by ourselves, not by anybody else," a confident Mukherjee said.
While there was some deceleration in industrial production and slower growth in interest sensitive sectors, he expressed confidence "that Indian economy would be in a position to come back".
Referring to the burning issue of black money, the Finance Minister said the government was committed to tackle the menace.
"Effort against black money is relentless...both administrative and legal steps have been taken to fight against this menace," he said.