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'We'd like More comfort in broad-basing of recovery'

rise. So, will it be one of the tougher years from the policy making perspective? There is some notion of a trend rate of growth, say, in the 8-9 per cent range. If the economy grows beyond that trend, that is overheating. We cannot remain over the trend for a long period of time without stoking inflationary pressure, for the simple reason that the economy does not have the capacity to grow faster than that rate. If the factors you are talking about take the economy above the trend, the risks of overheating develop and from a macro-economic stability perspective, we have to address those. Our focus is on whether this is being done within the overall capacity of the economy to sustain that growth rate. If growth is above trend, we need to find ways of dampening. There is some difficulty, of course, in identifying what the sustainable trend is in such a dynamic and volatile environment. This is an ongoing analytical objective This is your first monetary policy. What are your first impressions about RBI? The process is very intense and the amount of information and analysis that comes in is much larger than I appreciated as an outsider. What I have discovered is that the density of information and the amount of processing is huge. So, the confidence in the correctness of the decision is far more than it would have been, based on the data that I had available to me on the outside. It’s an extremely consultative process, both internally and externally, with RBI staff from many departments, banks and other market participants. The rigour of the process was a revelation; I did not appreciate it from the outside.

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