The wholesale price index, the most closely watched price barometer in Asia's fourth-largest economy, showed inflation rose to an 18-week high of 5.41 per cent for the week ended October 21, up a sixth of a percentage point from the previous week.

The price rise was driven largely by rises in prices of primary goods such as pulses, wheat, vegetables and fruit, according to official data released in New Delhi.

There are "some signals of overheating" in certain sectors, P. Chidambaram told a banker's conference, the Press Trust of India reported.

"Some sectors such as housing and credit cards are witnessing very high credit growth," Chidambaram said, calling on the banking sector to moderate lending to such sectors and re-balance its portfolios.

The minister's comments came a day after he told reporters, "I don't believe there is overheating" in India's economy.

Chidambaram told the bankers that curbing price rises was the government's "most immediate goal" and that he wanted to keep inflation "moderate at around four per cent through a mix of fiscal and monetary steps."

The latest inflation figures came after India's central bank earlier this week raised a key interest rate at which it lends to banks by a quarter point to 7.25 percent.

Analysts said the fact the bank raised the rate at which it loans money to the bank and not its main monetary tool, the reverse repo rate at which it drains funds from the system, was a warning that it could act again soon.

The finance minister held to earlier forecasts that the economy would grow at eight percent for a record fourth year in a row.