Reserve Bank of India Governor Raghuram Rajan interacted with students at a session organised by NDTV. Speaking to Dr Prannoy Roy, the RBI chief said that though the Indian economy is not in a phase of strong growth as yet, there is high possibility that the country will see strong growth over next two years.

Here are the key things that Dr Rajan said:

On Markets and Economy

Do not see a bubble in Indian markets

But faster rise in interest rates in the US could be a risk to global asset prices

Expectations are that the interest rates in the US will rise slowly given the global growth remains capped at fairly low levels

We are not in a phase of strong growth as yet

But high possibility that India grows reasonably strong over next few years

We will see pick-up in growth

Growth can't be instantaneous

Shouldn't over-invest in the infrastructure sector

Lower oil prices helping inflation come down

Have to try to reduce the stress in the financial system

India has benefited from the external environment

On Risksto Rupee

RBI is not targeting any value for rupee but wants to curb volatility

RBI is not trying to protect a particular level of rupee

Emerging markets are susceptible to volatility as the world exits the very accommodative monetary policy, but India has made major improvements since we experienced last round of volatility in July-August last year

We have more reserves; we have much smaller current account deficit

Inflation is lower.

Oil price fall has been helpful in this regard

Indian currency has more respectability now because inflation associated with it is significantly lower

Hopefully, we are on a strong growth path

We look different today from other emerging markets

I am hopeful that after an initial bout of volatility, we will come through and people will put their money back into India

I hope that the November trade deficit was one-off and expect gold imports to fall

On Interest Rates

Don't want to flip-flop on interest rates

Don't think the RBI has missed the bus to lower rates

The concerns are how long oil price will stay low

Once the disinflationary process is well underway, we will have the ability to be more accommodative in a sustainable way

RBI is not against growth, but looking for sustainable growth

Interest cut in India will show an impact 3 quarters later

In India, supply has been more constrained while demand has been strong

Have to fully solve the supply-side problem to contain inflation

The best way we can aid growth is by keeping inflation low

RBI is not against growth but it is for sustainable growth

But our horizon is sometimes longer than those who want us to cut rates

We should avoid blaming RBI for standing in the way of growth; there are many other factors that are needed to boost growth

Two Things He Wants In Budget

The government's emphasis on fiscal consolidation is a strong signal to the investors that will help both in terms of inflation and interest rates

GST will also be a big step forward

On 'Make in India' Push

Need to create the conditions for 'Make in India'

Let the entrepreneur decide where he wants to go - whether to manufacture for India or for exports

There is a lot the government needs to do

I am not an export pessimist, but I am against industrial policies that promote undervalued currencies and export champions

The world has changed a lot

On Crony Capitalism

There are concerns about crony capitalism

Crony capitalism is a phase that every country has to go through

We have plenty of good business people in India

What is worrying is a few people muddying the pool and making it difficult for everybody else

Debt is a sacred contract; if you borrow you have to repay

On Public Sector Banks

There were situations of non-transparent lending

Need to figure out the way to clean up governance in PSU banks

Expense structure in public sector banks is sometimes higher than private banks

There is a need to figure out how to improve debt recovery for public sector banks

Singapore has state-linked banks

Need to improve the quality of boards in banks

Need more professionals in public sector banks

On E-Commerce

There are tremendous possibilities in e-commerce

Uber was using a way of bypassing RBI regulations

No matter who you are, you can't violate regulations

New technology needs some adjustments in terms of regulations

On Cashless Currency