"Without any political push back as inflation rises, it is necessary to build institutions to ensure macroeconomic stability. Perhaps this is why successive governments, in their wisdom, have given the RBI a measure of independence," he said.

Outgoing Reserve Bank of India (RBI) governor Raghuram Rajan pitched for independence of central bank as he said such independence necessary for sustainable growth.

“The best way central banks can support growth over the medium term is by keeping inflation low and stable,” Mr. Rajan said in his speech at the 10th Statistics Day Conference held at RBI headquarters in the city.

“Without any political push back as inflation rises, it is necessary to build institutions to ensure macroeconomic stability. Perhaps this is why successive governments, in their wisdom, have given the RBI a measure of independence,” he added.

Mr. Rajan, who was appointed in September 2013 for three years, said last month that he will not seek a second term.

Some ruling party parliamentarians had criticised for not cutting rates quickly, which the critics believed hampering growth.

He also said criticism of the central bank using arguments unsupported by evidence is widespread.

During his tenure, Mr. Rajan has hiked interest rate by a total of 50 bps, then reduced it by 150 bps.

“This [loan demand] will not be fixed just by a cut in policy rates. Instead, what is required is a clean-up of the balance sheets of public sector banks, which is underway and needs to be taken to its logical conclusion,” he said