"My feeling is that central banks have to look at multiple targets, central banks should not look only at inflation target...," he said at an event here.
After hiking policy rate in two consecutive policies, the Reserve Bank kept did not change the interest rate expecting that inflation would moderate, among others.
The RBI is scheduled to announce its third quarter monetary policy review on January 28 in the backdrop of industry demand to reduce the key policy rate (repo).
Ahluwalia also pitched for further liberalisation of the country's financial sector.
"We should continue to liberalise. We have to keep in mind, we were responsibly well regulated. We should actively keep liberalising our financial sector...," he said.
The RBI recently gave freedom to banks to open branches and is also in process of issuing new bank licences in the private sector.
Recommending sweeping changes in the banking structure, an RBI panel has also suggested setting up of specialised banks to cater to low income households to ensure that all citizens have bank accounts by 2016.
It also suggested that facility for withdrawal, payment and deposit should be set up within a 15-minutes walking distance anywhere in the country.
Referring to International Monetary Fund (IMF), Ahluwalia said: "India does not have complain about IMF. But East Asian crisis did create some substantial negative impression about IMF. The IMFs lending to Europe can be questioned. IMFs lending to Greece can be questioned...," he added.
About rupee, he said: "The rupee is at its real value now."
The local currency closed on Monday at one-month high of 61.52 against dollar. Last year in August, it plunged to lifetime low of 68.85.
Speaking at the occasion, Nobel laureate Joseph Stiglitz said that cross border capital flows are major source of instability in emerging countries and central banks must regulate cross border capital.