New Delhi, Oct 21 (IANS): Finance Minister Pranab Mukherjee Friday said there was need for better coordination between fiscal and monetary policies to effectively tackle the global economic turmoil.

"The present global economic developments and more particularly the sovereign debt crisis of Europe has once again brought into focus the need for better coordination between monetary and fiscal policies," Mukherjee said while addressing the foundation day celebration of the state-run Vijaya Bank here.

He said better coordination between fiscal and monetary policies would help improve "overall economic stability and growth".

Tackling the economic problems, particularly inflation, need coordinated effort from monetary and fiscal policy makers in India.

The country's monetary policy maker Reserve Bank of India has hiked key policy rates 12 times since January 2010 to tame inflation. However, the move has not helped in bringing down inflation much.

Inflation has remained stubbornly high near double-digit since January 2010. The headline inflation based on the wholesale price index was recorded at 9.72 percent in September. Food inflation was at 10.6 percent for the week ended Oct 8, according to the latest official data.

Analysts have called for a better fiscal measures, which is decided by the government, to curb the inflationary pressure.

Referring to the turmoil in the European economies, Mukherjee said global financial markets have been troubled by the perceptions of inadequate solutions to the euro zone sovereign debt problems and exposure of banks to the sovereign debt.

"Global recovery will be affected by some of the fiscal consolidation measures being taken in some of the advanced economies," he said.

He said the banking sector in India had responded positively to meet the credit needs of the economy.