Need to make our tax regime more investor friendly: Raghuram Rajan

He also said that there should be greater coordination between leading central banks of the world, which would result in a more effective utilisation of monetary policy tools.

Reserve Bank of India Governor Raghuram Rajan has thrown his weight behind simplifying of taxation in the country, so that there is a conducive environment for the FDIs to invest.

He also said that there should be greater coordination between leading central banks of the world, which would result in a more effective utilisation of monetary policy tools.

"We need to make our tax regime more investor friendly." said Rajan at a seminar organised by 'Gateway House', a private think-tank on foreign policy.

Although in praise of PM Modi's "Make in India" project, the Governor said that only a easy and predictable tax structure will create the necessary framework.

He added that India is a very open economy, very dependent on international markets being open. "We buy lot of energy, lot of commodities. So we need international market to be very open and very competitive."

On the demand-supply dynamics needed to sustain a high growth rate, he said, "We have to create underlying supply conditions that would allow us to sort of have much higher demand. In some sense I see 9 per cent growth as a situation where we are investing tremendous amount and thus creating the supply which will then help the demand."

He added, "It is a steady process rather than an overnight process. It will take some time. I don't think that we will go overnight. That (the 9 per cent) is certainly an aspiration we should have, but we need to eliminate the supply constraints, including our human capital."