"The government is not in a state of panic, but worried that inflation could get to a level where controlling in becomes difficult" K V Kamath, the new CII President told PTI.
He, however, sought to underplay the political controversy over the inflation saying that "growth momentum is too strong for political vicissitude to hold sway."
Kamath, who also heads the country's biggest private sector lender ICICI Bank, noted that the current "inflationary momentum has caught us bit by surprise. Initially we thought it was only external factors and food driven but suddenly it has gathered momentum in the last 3-6 months."
When asked whether he would have liked some inflation-controlling steps to be taken earlier, Kamath said, "very little" at this point of time, because a large part of the inflation is imported, and could not be helped.
He, however, exuded confidence that political will of the nation would help overcome the crisis saying, "it is very difficult challenge that they have taken -- control inflation and grow. And the great thing I have seen is alignment of interest, not only in parliament but also across political parties."
"Growth rhetoric is too strong for political vicissitudes to hold sway," he said adding that industry was willing to contribute its part in meeting the challenge.
Asked if the government was bit late in bracing up to the challenge, he said the steps on supply side could have been taken possibly earlier. Kamath, who assumed office as CII president on Thursday, said the news is "very optimistic" on the growth front.
"I would have thought that if growth was to have started coming off, this quarter's corporate numbers should have started dropping dramatically. But it did not happen, only a slight slowdown is there," Kamath said.
While noting that the growth rates might not be that high in certain sectors like auto and textile, Kamath said, "by and large, a large number of people (among corporates) are talking positive language of an optimistic scenario".
Kamath, who met Prime Minister after being elected CII chief on Wednesday, said the industry would like to see an environment which enables it to sustain the growth and create opportunity.
"My message to the Prime Minister is that you have asked us to be optimistic and to look at growth target with focus and not losing focus. We will be aligned on that front in terms of that target," he said.
When asked what the industry would do to help check inflation, Kamath said the industry does it in a variety of ways, which might not be necessarily by cutting the rates.
"That is a message that has been given and we will consider it," he said, adding that it could also be done through increasing productivity, adding capacity and working on cost saving measures so that the product becomes cheaper.
"Industry is aligned, industry has heard the Prime Minister with a great degree of respect and the industry will act," he said.
"There is (also) an element of interest among policy makers. So you have policy makers working completely in sync. That gives me hope that it will be pulled up," Kamath said.
Kamath said the biggest strength for the industry is the growth momentum that has been created and this 10 per cent momentum should not be disturbed.