Reserve Bank of India Governor Raghuram Rajan on Monday said the best way to ensure sustainable long-term growth is to keep inflation low, while praising said the government’s move to set up a new monetary policy committee. Rajan was speaking at an event at the Tata Institute of Fundamental Research in Mumbai. He added that another major breakthrough was earmarking an inflation objective based on the Consumer Price Index.

While the furore around his decision to not return for a second term as RBI governor has not died down yet, Rajan’s speech stuck to fiscal matters and said the new monetary policy framework could keep India’s growth steady and inclusive. According to Rajan, “We can never abandon inflation to focus on growth”, and pointed out that an “inflation-focussed framework” would help the government and central bank work together for greater macro-economic stability.

Rajan pointed out that India had settled on high inflation rates before 2013, which had adversely affected the middle and lower classes. The situation now, he said, is “truly extraordinary – by focusing on low inflation, we are abandoning the ways of the past that benefited the few at the expense of the many.”

In the only reference to his stepping down, he said that he hopes his successor will “internalise” the current framework and maintain the low-inflation outlook for the country.