"We are in recovery. That's broadly what we said before and by and large, we would stick to that. There is volatility in this recovery process. So, it's not a strong (and) sustained recovery where all the signals are exactly in the same direction," he said.

Rajan was speaking to reporters after the RBI board meeting, which was addressed by Finance Minister Arun Jaitley.

The RBI chief described the index of industrial production (IIP) numbers released yesterday as "certainly somewhat disappointing", though he did observe that the economy is broadly moving in the "direction of strengthening growth".

The industrial output for the third month in a row remained in the negative territory, contracting 1.5 percent in January due to poor showing of manufacturing and capital goods sector.

The declining industrial output prompted India Inc to press for a rate cut by RBI, which is scheduled to announce its monetary policy on April 5.

On whether RBI would take into account the government's resolve to stick to the fiscal consolidation path and ease the monetary policy to boost growth, Rajan said the headline number of 3.5 percent fiscal deficit target is a firm indication of government's intent for fiscal consolidation.

Jaitley decided to keep the fiscal deficit target at 3.5 percent of GDP for 2016-17, overlooking the suggestion for greater public spending to boost growth.

Fielding questions on fiscal deficit, Rajan said the government could explore the possibility of moving to a cyclically-adjusted fiscal deficit target.

The government has decided to set up a committee to review the Fiscal Responsibility and Budget Management (FRBM) Act and look into the feasibility of setting a range for fiscal deficit targets rather than a fixed figure.

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