India can be far more successful, influential: Raghuram Rajan

“Let us recognise we are doing quite well, not great, (but) quite well in comparison”, said Rajan, who has often been critical with his assessment of the state of the economy.

Reserve Bank of India governor Raghuram Rajan is under growing pressure, from industry and from within the government, to cut interest rates as India’s economic growth stutters and inflation cools.

RBI is scheduled to hold its next monetary policy review meeting on September 29, and expectations for a rate cut, the fourth this year, have increased after the US Federal Reserve decided on Thursday night to leave interest rates unchanged at near-zero levels.

In New Delhi, Economic Affairs Secretary Shaktikanta Das said the US Fed decision gives more room to emerging markets for policy adjustment.

On the U.S. central bank’s decision to delay the much awaited rate hike, Rajan said, “We have noted the Fed decision of yesterday”. “It’s possible to grow too fast with substantial stimulus as we did it in 2010 and 2011, only to pay the price in higher inflation, higher deficits and lower growth in 2013 and 2014”.

Outlining the need for an effective resolution system to preserve enterprise value of loss-making companies, Rajan said the country needs a speedy Bankruptcy Code which will hasten dispute resolution and broaden bond markets. We have to be careful while pursuing growth and have to make it sustainable. “But with the world being an inhospitable place, we’ve to work hard to strengthen our current recovery and put it on a more sustainable footing”.

Industrial countries are still struggling, with a few exceptions, to grow.

The RBI chief said he has seen some “incredibly good” fakes of Rs 500 notes, but added there are a slew of security features which keep getting added. By continuing with reforms that the government and regulators have announced a sustainable growth potential can be achieved.

Lending his support for the issue of unique identity cards to the people Rajan said on that can expand the access of the poor and young to credit as they borrow against the collateral of their future good name it will also allow the regulator to detect and curb over-lending to individuals by asking lenders to report the IDs of borrowers to credit bureaus.