The Indian government has been working hard to fasten the GDP growth.
The Indian government has been working hard to fasten the GDP growth.
Mumbai
: RBI Governor Raghuram Rajan has said India should restrain itself from being -"too ambitious-" at a time when the world is full of uncertainties and instead focus on sensible policies to ensure a sustainable economic growth. -"Given great uncertainty about outlook and policies of others in these times, a country like India should try to take sensible measures without getting too ambitious, as we have done so far,-" Rajan said, delivering the Mahtab Memorial Lecture in Bhubaneswar late last evening. -"This will serve as a sound basis for strong and sustainable Indian growth as the world economy picks up,-" Rajan, whose remarks comparing the Indian economy with an one-eyed king in a blind world led to a controversy, added.
The Indian government has been working hard to fasten the GDP growth and aspiring to take it to the double-digit mark from the current 7.5 per cent in the medium term. It has, however, adhered to key targets like the fiscal deficit number and also made inflation-targeting a key objective for the central bank. Rajan said the world is growing -"extremely slowly-", with the factors differing from one country to other and termed notions of a de-coupling of growth between industrial countries and emerging markets as -"illusory-". -"Easy and unconventional monetary policy in industrial countries could increasingly be a part of the problem,-" the academic-turned-central banker said and reiterated this creates problems around capital flows for emerging markets.
He called central banks around the world to -"start thinking more internationally-" and stressed on the need to -"start discussing new rules of the monetary policy game in the international setting.-" As such a goal will take years, an emerging country like India should focus on macro-stabilisation, building buffers and reducing vulnerabilities, Rajan said. -"Good policy is the first line of defence including our focus on controlling fiscal deficits, reforms like the Bankruptcy Code and Aadhaar, and our steady fight against inflation,-" he added.
The country has also taken other additional measures like control inflows, intervening in the foreign exchange market as a macro prudential measure to reduce volatility, and maintaining sufficient foreign exchange reserves to be able to withstand a sudden stop in capital inflows, Rajan said.
