New Delhi: Days ahead of the Reserve Bank's annual credit policy, London-based industrialist and founder of the Caparo Group Lord Swraj Paul on Friday said inflation needs to be contained by reducing liquidity in the system.
"We need to control inflation which will hurt the industry, because the only way to control is to tighten the money flow. That is the temporary measure, but you have got to take (it)...This is the only way to control inflation...take money out of the system," he said while addressing employees of SAIL here.
The Reserve Bank of India (RBI) is slated to announce the annual credit policy on April 17. The central bank is expected to take a call on changing interest and announce other steps to deal with the liquidity issues.
"There is too much money being wasted. We cannot afford that much waste," Lord Paul said, adding that "there is no magic formula for 10 percent or double-digit growth".
India's economic growth rate slipped to 6.9 percent in 2011-12 from 8.4 percent in the preceding two years. The government is aiming a growth rate of 7.6 percent in the current financial year, though it has the medium-term goal of achieving the double-digit growth.
With growth declining and inflation coming under control, India Inc has been pitching for interest rate cut by RBI in the credit policy next week. Inflation, which was close to double-digit during 2011 came down to 6.95 percent in February.
Lord Paul suggested the there should be two growth rates in the country -- one for rich and the other for poor – to find out whether the benefits of growth are reaching the needy.
"We should have two separate growth rates in this country. One for the poor men and the other for the rich men, then only people will know that poor man does not get the benefit of this seven percent growth rate. It seems to be shared only by rich men," he said.

To effectively deal with the problem of poverty, Lord Paul suggested that subsidies should be directed to the needy.
"All subsidies should be stopped, except to the poor man or the poor farmer. I have been arguing for that in India for the last 30 years. We cannot have that much poverty. 500 million, 600 million, 700 million (people) ... everybody has different poverty line.
"Somebody and everybody has to pitch for them. It is not acceptable to a country of India's stature to have that many people in that situation. It is a very sad situation," he added.