Challenge is to maintain growth: Rakesh Mohan

The biggest challenge for India’s new government is managing the impact of the global financial crisis and maintaining growth, Reserve Bank of India Deputy Governor Rakesh Mohan said.

“The most challenging task for the new government is keeping up the growth momentum while the rest of the world is actually suffering recession, or negative growth,” Mohan told reporters today in Mumbai. “We have to continue being pragmatic and do whatever is necessary.”

Maintaining growth with low inflation and keeping prices and the financial markets stable are the key objectives of the nation’s central bank, Mohan said.

“Price stability is not an issue at the moment because we have low inflation,” Mohan said. “We are unlike the rest of the world as our markets have been functioning well though there has been a greater degree of volatility than usual.”

India’s money, foreign exchange and capital markets have been functioning well, Mohan said. “Uncertainty in the world is still very high and we cannot ignore the fact that we are more integrated than we used to be,” he said.