Mumbai: Putting hope in the country's economic growth, Reserve Bank of India Governor Raghuram Rajan said that “India should not settle for anything less than a double digit growth in the medium term after progressing strongly in securing its macroeconomic fundamentals since late 2013”.
He said that FY15 growth estimate might have been below potential by standing still at 5.5% however, it is inching towards potential next year by touching atleast 6.5%.
He asserted, “We need to go back to double-digit growth. For that, we need to do a lot of homework on the financial side, human capital side, on the physical and infrastructure side. But I don't think that is out of question." This, he said, in an interview to Economic Times.
He admitted that the country has strongly fought with inflation in the past few months however, it could still not be called as victorious. He rather insisted to have more credibility.
Moving on to food management crisis, the anti-inflation stalwart said that this is something that will still take more time as ours is a more volatile economy in context of inflation as compared to others.
Speaking after unveiling the mid-quarterly review of monetary policy on Tuesday, Rajan had said the trajectory of future cuts would depend on the quality of fiscal consolidation and on the future trajectory of inflation.
Rajan had been quite critical of the unconventional monetary policies also. He said that these policies create an effect of wealth and boost demand however, does not really contribute to growth.
With the budget to be unveiled soon on 28th of February, it is expected to boost industrial and infrastructure investment and curb needless spending. It is also expected to rein the subsidy culture through targeted allocation of payments for various social programmes through the direct benefit transfer.
