RTTNews - Reserve Bank of India or RBI Governor D. Subbarao in an interview with Central Banking Publications, London, recently, said the challenge before the RBI was to create the stage for a 9% growth in an environment of price and financial stability.
India has achieved growth of 9% over the four years to 2008 and has slumped to 6.7% during the last fiscal. The Governor said the RBI's prime objective was to turn the economy into high growth path.
On domestic consumption, the governor said that the country's consumption level at 57% of GDP was relatively high for an economy, considering India's per capita income level. He stressed the need to boost investment, especially in infrastructure rather than on consumption.
He said India's policy action has been structured to suit Indian situation and was aimed at minimizing the impact of global economic crisis.
Commenting on negative territory of inflation, he said that the current temporary negative inflation was not structural in nature, but rather it was only statistical. He added that the negative inflation does not reflect a demand constraint. India's economy is supply-constrained and not a demand-constrained.
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