Mumbai: The Reserve Bank’s main policy objective in the global crisis of today would be to arrest the moderation in economic growth and restore the eroded market confidence, apex bank Governor D. Subbarao said.
“In a crisis of this nature and magnitude, no country is an island ... India too is hit by the crisis ... The main objective (at present) is to arrest the moderation in growth,” RBI Governor D. Subbarao told a seminar organised by Ficci.
The moderation in the country’s growth has been more steep than expected, Subbarao said, adding that the fundamentals remain strong and will help India to recover from the global financial crisis faster.
The Government had projected a GDP growth rate of 7.1% in 2008-09.
The strong fundamentals of the economy helped India to clock an average 9% growth rate in the last four years, Subbarao said.
“Once the world economy regains growth, India’s recovery will be much faster and steeper than the rest of the world,” Subbarao added.
Subbarao said banks are yet to respond to the policy actions as much as warranted.