"It (inflation) is perilously close to double digit...RBI is also watching the situation like the government and collectively it would be possible for us to tackle the problem," Mukherjee told reporters here.
His comments came as headline inflation soared to 9.78 per cent in August, from 9.22 per cent in the previous month, because of rising prices of food and manufactured items.
Mukherjee attributed the rise in the rate of prices to global factors and said the increase was on expected lines.
"Of course, in the overall environment, all over world it was expected that inflationary pressure would rise in all groups including manufacturing (segment)," he said.
"This is time of stress not only in India but all over world and we shall have to maintain our nerves and we shall have to see how we can overcome the problem," he added.
RBI is scheduled to announce its mid-quarterly monetary policy review on September 16. It is facing a tough situation of managing a situation of high inflation co-existing with moderation in economic growth.
Industrial production fell to a 21-month low of 3.3 per cent in July. The country''s GDP growth also slipped to 18-month low of 7.7 per cent in April-June period.
RBI has hiked rates 11 times since March 2010 to tame inflation. However, India Inc has said that the rising cost of credit has slowed down investment, thereby hurting growth. PTI DM BKS PPB JD ANZ SA