"This government came in with tremendous expectations and I think the kind of expectations were probably unrealistic for any government," Rajan said responding to questions after his address to the Economic Club of New York on Tuesday.

He said in the minds of the people, Prime Minister Narendra Modi's image was that of "Ronald Reagan on a white horse" coming to slay anti-market forces and such comparison was "probably not appropriate."

Rajan, however, said the government has "taken steps to create the environment for investment, which I think is important."
    
Rajan's remarks come as the Modi-led government completes one year in office this month, having received a commanding  majority from an electorate that wanted jobs, economic development and respite from rising prices and corruption.
    
Rajan said there are several areas where the government has taken more "serious and significant" advances to improve investor confidence and propel growth. On the issue of subsidies, he said petrol and diesel subsidies have gone.
    
"Going forward these subsidies will be transferred directly into bank accounts," he said, adding that already the cooking gas subsidy is being transferred directly to bank accounts.

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