NEW DELHI (Reuters) -- A sustained decline in inflation in recent weeks has given the Reserve Bank of India (RBI) room to raise liquidity without fuelling prices, Commerce and Industry Minister Kamal Nath said on Monday.

Nath, who was speaking at a business conference in the capital, said the government may announce further stimulus measures after the end of January.
“There is room for injecting more liquidity,” Nath told reporters. “RBI will certainly consider this and devise commensurate policy for injection of liquidity into the economy.”
He said recent cuts to policy rates and banks' cash reserve ratio (CRR) had increased the supply of funds, offering comfort to a severely squeezed industrial sector.
The central bank which meets for a scheduled review on Jan. 27 has cut rates sharply to boost sagging growth.
The RBI's last 50 basis points cut in the CRR kicked in over the weekend, releasing 200 billion rupees ($4.1b) into the banking system.
On Saturday, Prime Minister Manmohan Singh said inflation was expected to decline further and that would provide ample flexibility for monetary policy.
Wholesale price inflation, the most commonly watched price barometer in India, peaked at 12.91 percent in August and has more than halved since then to 5.2 percent in early January. Economists expect it to fall to 1-2 percent by March.
Most analysts expect growth to be around 7 percent for the current year ending March, sharply below an average rate of around 9 percent in the last three years. Economists expect the central bank to cut rates by 50-100 basis points by March.