Keeping inflation battle at the top of agenda, the Reserve Bank of India (RBI) Governor Raghuram Rajan has asserted that the central bank's focus is to bring down inflation to boost investor confidence. Emphasizing the need for India to strengthen its fundamentals like inflation rate, the Governor has stated that if investors have a sense that inflation rate is going to come down, both domestic and international investors would be more prepared to take a bet on the rupee.
RBI had already highlighted that persistence high Inflation has been impacting the economic fundamentals particularly domestic currency. WPI inflation eased to eight-month low at 5.05% in January as compared to 6.16% in December. Meanwhile, the domestic currency has depreciated over 15% during 2013 mainly on account of high gold imports and high capital outflow.
Regarding the prospect of new government after the May general elections, Raghuram Rajan expressed hope that a stable government after the Lok Sabha elections will continue the broad fiscal policies of the current regime and India may finally get the Goods and Services Tax (GST), an ambitious indirect tax reform measure.