Mumbai, Feb 17 : Reserve Bank of India Governor ,Urjit Patel on Friday said that India's economy will take a sharp upswing as a result of scrapping old Rs. 500 and 1,000 notes.
Almost everyone agrees that the impact is going to be a sharp V, that we would have a downgrade of growth for a short period of time, he told CNBC-TV18 in an interview.
He also spoke in favour of continuing with globalisation despite the US protectionism being put in place after Donald Trump took over as President.
Patel said the benefit of demonetisation will take time to be felt.
Replying a question on the possibility of India achieving 9 per cent GDP growth, Patel said it is difficult to say, but higher growth rate can be achieved when fundamental reforms, including in the fields of production, are undertaken.
Now, how much higher than 7.5 that we are achieving so far is difficult to say. But the fact is, we need to grow at some point faster than we are now...I think 7.5% growth rate is not something to be disappointed about.
The best way that the central bank can support growth on a durable basis is to ensure inflation is low, stable, there is financial stability and that is the role the central bank plays. Very few countries grow at a high rate if inflation is high and volatile. So, I think we are doing our bit to support higher growth rate, but on a durable basis, he said.
The RBI Governor expressed concern over the US moving towards protectionism.
I think it is a cause of concern for the world, I think it is a cause of concern for the emerging markets in terms of creating financial volatility. I dont think anyone will be safeguarded from it. We have to manage this as it plays out, he said.