At the same time the central bank has a responsibility to see that the inflationary pressures are kept under control, he said.

The capital inflows are also improving, he said. 'Even in the current year, the inflows are much higher than what they were last year. Both FDI and FII (foreign institutional investment) inflows will be larger this year. The total addition this year will be of the order of $20 billion.'

Rangarajan feels there is no need for another stimulus package.

'The package already given is very good. The fiscal measures of increased expenditure will go on till March next year. We will have to review the situation after that.'

On disinvestment, he said the government would have to take into account concerns of different people and decide the appropriate time. 'The appropriate time is when the stock markets are doing well. They also have to ensure that they carry everybody with them.'