Reserve Bank of India (RBI) Governor Raghuram Rajan has reiterated his confidence in the Indian economy saying GDP growth is poised to improve to 7 per cent over the next three years although it would be a steady and not a V-shaped recovery. The Governor was speaking at an event organised by Citibank in Boston on Thursday. “Recent development on resource allocation such as coal may create uncertainty in the short term, but long-term, it is a positive development,” Rajan said, according to a Citi report on the event. The report quotes the Governor as saying that the RBI considers it prudent to be prepared for the eventual exit from low rates. The RBI has pushed the average duration of bond holding to three years and built up adequate reserves while also curbing volatility in the forex market. Rajan also said that the limits for government securities will be steadily increased but the RBI is comfortable with the current limits. On price rise, Rajan said that while inflation was off peaks, it remained high due to supply-side rigidities. Nevertheless, the aim was to achieve 6 per cent by January 2016 and to fight rising inflation just once. FE
