Reserve Bank of India [Get Quote] Governor Y V Reddy on Tuesday admitted that inflation in India's food prices is much higher than the country's 'tolerance limit' necessitating  a comprehensive review of the situation.

"We anticipated some inflationary pressures but it turned out to be more intense and we have to examine all aspects of the situation, both global and domestic," Reddy said during a brief interaction with journalists after a panel discussion on 'India as an emerging economic giant' organised by Columbia University's World Leaders Forum.

"Definitely the level of inflation is unacceptable to us. In particular, we have to see that the aggregate demand management is consistent with supply side initiatives," he said in response to a question.

"We are having a meeting of the Policy Advisory Committee and we expect to make an announcement on April 29," Reddy said, adding that it's a situation that requires continuous monitoring and action.

• How inflation has hit India

In response to another question on whether from a monetary policy standpoint he was going to be taking actions to try to counter food price inflation, Reddy said in terms of monetary policy actions they will be governed by lot more desegregated analysis of the situation.

He said, basically one has to recognise that what constitutes 'core inflation' and one has to be careful about the concept. "In some senses we are not looking at core inflation, we are looking at headline inflation and we are making a desegregated analysis of the various components of inflation and we have adopted a multiple indicator approach," he said.

"So, in some senses we are aware of all these developments and we have been sensitive to the developments. The food prices play a big role partly because they have a larger weight in our indices and partly because the inflation perceptions are influenced significantly by food prices and that also influences inflation expectations," he said.

"This is the analytical framework in which we operate. But at the same time as far as the supply side is concerned, that is to be considerably, almost wholly at the initiative of the government. As I mentioned, the prime minister himself along with the National Development Council has taken an initiative for the medium term," Reddy said.

Earlier, during a question answer session following his lecture at the Columbia University and a  panel discussion with Jagdish Bhagwati, University Professor of Law and Economics, Reddy said that the monetary policy advisory committee should be able to discuss the issue soon, including the issue of global supplies versus demand and the issue of expectations vis a vis the monetary policy.

"It's a continuing dynamic and I do not think one can take a certain view on this at this stage," he said.