Dr Rakesh Mohan, Deputy Governor of Reserve Bank of India said that given the global uncertainties to do with financial markets, inflation and global economic slowdown, the RBI wants to be very clear that it does the kind of macro and monetary management in India which helps the country to maintain its growth momentum along with price and financial stability.

Excerpts from CNBC-TV18's exclusive interview with Dr Rakesh Mohan:

Q: This seems to be an implication that RBI wants to protect growth, is there any underlying fear that things are going out of hands globally; the syndrome of the late 90s of unfinished steel plants, steel borne refineries - is there even a remote fear that thing can happen?

A: We are not backward looking by constantly thinking about what may have happened in late 1990s because situation today is completely different from what happened in 1990s. Having said that, as I tried to explain in my introductory remarks that given the global uncertainties to do with financial markets, inflation, global economic slowdown, we want to be very clear in our minds that we do the kind of macro and monetary management in our country which does help the country to maintain its growth momentum along with price and financial stability.

We have managed to do that over the last number of years. But the domestic conditions in terms of investment intentions, the performance of the corporate sector, in terms of somewhat better supply elasticities showing themselves, in terms of infrastructure investment as such that the objective circumstances are such that we ought to be able to maintain and help the growth momentum. What we clearly do want to guard against is that we do understand that sentiment plays a role in the real economy; that we want to maintain a stable and realistic sentiment - it is consistent within the domestic conditions.

Q: Dr Reddy indicated that you do not expect 5.5% just yet, there will be a while before the steps take effect there will be a lag, what is your tolerance limit in terms of time, how much patience will you have before you maybe forced to take more steps?

A: This seems very difficult to define precisely because one never knows what happens in the future for example, in the global situation there is a school of thought which suggests that because of the expected global slowdown and most serious slowdown in the United States - that itself will bring global inflation down including commodity inflation along with the economic slowdown and therefore the demand would go down for commodities as such. Another school of thought says that, it is not correct, that in fact a global situation might actually suffer from the stagflation in the coming months. So these are the kind of issues that we have to watch for and then take action as necessary.