"There is a lot of uncertainty about what the real numbers are...the numbers have to come out but China is a big country, has become very important to the global economy. Every adverse development across the world affects the rest of the world in some ways," Rajan said about the China-led slowdown.
"It works through financial markets first, then trade later. So it's something that everyone is concerned about. But you have to be careful about attributing everything to China," he said.
Rajan also issued a warning against overburdening central banks to fix struggling economies.
The man in charge of India's monetary policy warned that economic problems can be solved only through reforms and over intervention by central banks could lead to 'more bad than good'.
"I have been a little concerned about the immense burden for action that is falling on central banks and I think it is quite legitimate for central banks to say at some point we can't carry the burden ourselves in fact we may not have the tools to do everything that is asked of us," Rajan said.
"Don't keep asking us to do more because at some point we get into territory where the consequences may be more bad than good if we actually act," he stressed.
Rajan acknowledged that his situation was not typical in the current climate because unlike most global economies India still has high inflation at close to 6 percent. Interest rates are also high at 7.25 percent despite having been cut three times this year to try and stimulate growth.


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