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MUMBAI (Reuters) - The government aims to keep inflation below 5 percent in the fiscal year beginning in April and may take more monetary measures to curb price pressures, the Economic Times said, quoting Finance Minister Palaniappan Chidambaram.

The government slashed duties on a host of items in its annual budget on Wednesday to check rising prices in Asia's fourth-biggest economy that is expanding at about 9 percent.

"The budget can only take fiscal steps. We have hinted that more monetary steps could be taken in due course," Chidambaram told the newspaper in an interview published on Thursday.

India's annual inflation for the 12 months to Feb. 10 was at 6.63 percent, higher than the central bank's projection of 5.0-5.5 percent by end-March and just below 6.73 percent for the previous week, which was the highest in more than two years.

The central bank has raised the percentage of deposits that banks have to hold with the central bank twice in the past two months.

It has also increased its key lending rate four times in the current fiscal year by a total of 1 percentage point, and its borrowing rate twice by 25 basis points each to check price pressures.

Separately, in an interview with the Financial Express newspaper Chidambaram said the government was aiming for a 10 percent economic growth in the next fiscal year.

"As far as inflation is concerned, we are trying to keep it between 4-5 percent, which is the optimum limit. Broadly, we are targeting 10 percent growth and inflation below 5 percent over the medium term," he said.