The Reserve Bank of India (RBI) Governor Raghuram Rajan has asserted that the government and the RBI will formulate monetary framework this year for the central bank. The Governor added that sound monetary framework is likely to help take strong decisions towards an objective which has much more emphasis on inflation.
Rajan reiterated that central bank is aimed to bring down the headline number to 8% by end of this year and to 6% by the end of next year. The Reserve Bank of India (RBI), with an objective to generate long term economic growth by bringing down inflation over a reasonable period of time, has raised lending rate three times since September’13 in order to tame price rise through cooling demand.
On economic growth, Raghuram Rajan stated that Indian economy is witnessing recovery with the country's GDP growing to 5.7 percent in Q1FY15 up from about 4.6 percent a year ago. RBI expects 5.5% economic growth for the current fiscal. RBI’s Governor further said that India’s new government may take some time to unveil grand, big picture reforms as it is currently focusing on implementation of stalled projects worth $50-70 billion that will pay dividends in the short run by helping on the inflation and income fronts.
Governor further stressed that the RBI is also focusing on macro stabilization and country’s macro-economic indicators like current account deficit, fiscal deficit, and inflation are expected to improve further in future. If the global economic growth surge in future, it will help countries like India tremendously.