Indian bond yields fell on Friday after Rajan's remarks, showing the level of concern about high inflation and investors' anticipation that the RBI will continue efforts to stabilise the economy.
'We are by no means anywhere nearing having external financing difficulties or internal financing difficulties. The government's credit is solid, there is absolutely no difficulty for the government in borrowing and it is borrowing effectively from the public today in a fairly free public debt market,' the RBI governor tells a meeting in Washington, DC
'Government of India has the right to give directions to RBI'.
Rajan also 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, an ambitious indirect tax reform measure.
Rajan also reiterated his view on the growth rate being inextricably linked with curbing inflation.
India's macroeconomic indicators are improving and inflation has been coming down consistent with the central bank's forecast, but Asia's third-largest economy needs investment growth to pick up, he added.
Stocks and rupee on Monday took an early morning plunge but soon recouped their losses.
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The truth is the government and the Reserve Bank enjoy a free, frank and cordial relationship.
Reserve Bank Governor Raghuram Rajan today criticised multilateral institutions like the IMF and the World Bank saying "they are not immune to cognitive capture".
Rajan has already warned he does not have a 'magic wand' to deal with India's economic crisis.
Analysts say the RBI could resume tightening monetary policy by early next year should inflation remain high, even as the economy is growing below the decade low of 5 percent posted in the fiscal year ending in March.
Minutes after the Union Cabinet approved raising the cap on subsidised liquefied petroleum gas (LPG) cylinders from nine to 12 per connection in a year, Reserve Bank of India (RBI) Governor Raghuram Rajan questioned the decision, suggesting it was "misdirected subsidy".
The government-appointed Financial Sector Legislative Reforms Commission (FSLRC) has recommended a slew of reforms to overhaul the sector.
The current account deficit, which is the difference between inflow and outflow of foreign exchange, rose to a record high of 4.8 per cent of GDP in 2012-13, from 2.8 per cent in 2010-11.
'There will be no serious effect on Indian economy because one person, one man, however powerful, however influential, however great, cannot have an impact on an economy as big and complex as India.'
Rajan was speaking at a news conference.
Inflation is a big concern for India, says RBI chief Raghuram Rajan.
Rahul Gandhi hailed the RBI Governor for steering the Indian economy in "difficult times"
Business houses expect rate cut in next RBI policy.
Regardless of who is right, Rajan has to quickly come to grips with a number of obvious challenges, ranging from the immediate to the medium term.
In the global context, the country "stands out" in terms of relatively stronger growth and improved economic fundamentals, Raghuram Rajan said.
Of the seven members, four are proposed to be government nominees and the rest from RBI.
Rajan's comment comes against the backdrop of certain BJP leaders questioning his policies to deal with the current economic woes.
Rajan sees banks passing on the benefit of lower rates regime to customers.
"I think bankers have expressed some concern that they should not be held liable for actions that are taken in the full spirit of what is needed," Raghuram Rajan said.
We need a change in mindset, says the RBI Governor.
Centre to take a call only in August, just a month before his three-year term ends.
Reserve Bank Governor Raghuram Rajan expressed confidence in India's growth and said the country is on target to meet Jan inflation target of below 6%.
People who advocate a rate hike because inflation is very high, even without the food component, have in mind some developed-economy structure, Raghuram Rajan tells Business Standard in an exclusive interview.
Reserve Bank Governor Raghuram Rajan on Tuesday again surprised the markets and raised the key policy rate by 0.25 per cent to 8 per cent in a bid to curb inflation, a move that may translate into higher EMIs and push up the cost of borrowing for corporates.
"Finance Ministry and RBI keep talking all the time," Rajan said.
RBI governor advises students to not take advantage of economic freedom
RBI Governor cautioned against more volatility.
RBI Governor Rajan on Wednesday said significant progress made in curbing current account deficit.
It is unlikely that the RBI will drop rates until the inflation rate drops below five per cent.
'There are lots of low hanging fruits and often no real impediment to plucking them.'
Captains of the industry, including Adi Godrej and Anil Ambani, were among the early birds from India Inc to cast their votes in the financial capital.
Raghuram Rajan has described the fall in reserves as dip in valuation with appreciation of dollar against other currencies
RBI Governor Raghuram Rajan will announce the monetary policy on April 1 and expectations of a status quo are rising ever since the official data on consumer price inflation for February pointed to a cool down to 8.1 per cent.
The bank's base rate currently stands at 10 per cent and the last movement in it was in November last year, when it was hiked by 0.20 per cent.
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