Finance Minister Pranab Mukherjee today exuded confidence that the economy will soon return to 9-10 percent growth, but said that double-digit inflation and excessive borrowing were major challenges.

"We shall have to move towards the betterment, towards the development and 9 to 10 percent growth is achievable. It is not a pipe dream," he said while winding up the discussion on the general budget in the Rajya Sabha.

At the same time within the framework, it is possible to control inflation to ensure that it does not eat up the benefits of growth. "Benefit of growth is necessary, price control is necessary, fiscal consolidation is necessary," he added.

On high inflation, the minister said it was mainly due to a low base. Last year during these months, inflation was in negative zone and the impact of low base may remain for few more months till May/June this year.

"I will not be surprised if it (inflation) reaches double digit in March," he said. The general inflation has already touched 9.89 per cent in February. Inflation numbers for March would be announced in mid-April.

The Centre, he said, has taken all steps to insulate the vulnerable sections by releasing food grains for sale in the open market and is working closely with the states to address the issue.

A meeting of the committee of the chief ministers, constituted by Prime Minister Manmohan Singh to deal with rising prices, would be held shortly to take stock of the situation. .

Referring to fiscal consolidation, Mukherjee said it was not advisable to go in for unlimited borrowing as it would adversely impact India's financial credibility.

"Our fiscal credibility will otherwise be seriously challenged, if we indulge in financial profligacy. It is not possible...living on unlimited borrowing is not possible," he added.

The government had injected Rs 1,86,000 crore through a series of stimulus packages to perk up the economy, hit by the global financial meltdown since 2008, which resulted in high fiscal deficit of 6.8 per cent of GDP.

The government has projected fiscal deficit to come down to 5.5 per cent next financial year as it partly withdrew stimulus and restored customs duty on crude and increased excise duty on petrol and diesel in Budget 2010-11.

Mukherjee further said the decision to raise duties on crude and petroleum products would also benefit the states as additional revenue of Rs 26,000 crore would be shared with them.

The increase in petrol and diesel prices through administered price mechanism would have deprived the states of their share of taxes, he added.

The government today completed the first stage of budgetary exercise as the Rajya Sabha returned the Appropriation Bills. These Bills, which were earlier approved by the Lok Sabha, will enable the government to withdraw money from the Consolidated Fund to meet necessary expenses during the first three months of the next fiscal.