New Delhi: With policymakers running out of fiscal and monetary tools to deal with the economic slowdown and high inflation, Finance Minister Pranab Mukherjee on Thursday called for "innovative remedies" to deal with these challenges simultaneously.

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 "Options today are much more limited. The options for fiscal steps as well as monetary measures are increasingly becoming limited. However, there is potential for policymaking in other areas," he said at the Delhi Economics Conclave.

 "Innovative remedies would be required to address these challenges simultaneously," he suggested.

Admitting that the fight against inflation and tight monetary policy regime were hurting growth and investment, the minister said the "slowdown in industrial growth is of a particular concern, as it impacts employment".

 In addition, inflation is at an unacceptable level and "there are also immediate concerns relating to fiscal deficit and current account deficit", he said.

India is likely to clock economic, or GDP, growth of around 7.5 per cent this fiscal, as against 8.5 per cent in the previous year.

India Inc has been complaining that the tight monetary stance of the Reserve Bank is impacting investment and industrial growth.

All eyes are now on the RBI's scheduled review of the monetary policy tomorrow. It has hiked interest rates 13 times since March, 2010, in its bid to tame inflation.

Mukherjee said, "Slowdown in industrial growth is of a particular concern as it impacts employment. Inflation is at an unacceptable level, there are also immediate concerns relating to fiscal deficit and current account deficit."

In 2008, the government had provided a fiscal stimulus worth Rs 1.86 lakh crore, or 3 per cent of the GDP, to cushion industry against the adverse impact of the global slowdown.

With the fiscal deficit widening amid a slowdown of the economy in the current year, the government would find it very difficult to come out with another stimulus package to deal with the slowdown in economic activity.

Asking for Opposition support in the implementation of key economic reforms, the Finance Minister said the government has sought to unblock economic bottlenecks in recent months through various initiatives such as the National Manufacturing Policy, increased FDI in retail and other financial sector legislations.

"We do hope greater consensus on these issues would help speed up their implementation," he said.