He also said that India has to go a long way to reach the per capita GDP level of China and needs many more years of sustainable strong growth.

Rajan was speaking here at an interactive session at National Institute of Rural Development and Panchayati Raj.

"The issue of value of the rupee is a complicated one. Some people think that to increase exports, the answer is devaluing rupee. There are, strictly, ways of doing it (devaluation), but lot of them require significant actions on the financial system that some of our neighbouring countries used for long time," Rajan replied to query on the devaluation of rupee to deal with the global slowdown.

"It has lot of side effects including...the inflation will pick up in this country if you have to pay significantly more for your imports. You have to pay significantly more for your oil, it will have inflationary impacts.

"It (devaluation of rupee) may offset any benefits you get from the devaluation. My belief is that today's value of the rupee is pretty reasonable and I don't think we should emphasise moving one way or the other as the answer to any problem," he said.

On growth, Rajan said India's growth rate has to be stronger and sustainable to reach Chinese levels.

He said: "China's per capita GDP is about four times of India today. So yes, we have a long way to catch with the level of per capita GDP and that means many years of strong sustainable growth.

"I want to emphasise here, because a few years of growth will not help. After those few years, we have very slow growth. We need sustainable growth which is why we need systems in place, we need macro-stability in addition to the growth."

He said India's credit to GDP is 50 percent, which is significantly below when compared to some of the emerging markets such as China, where the value is 150 percent.

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