"I would like to say that India needs a decisive government," Rangarajan said on a question on current state of politics in the country, when some surveys suggest that no party will get a clear majority in 2014 elections.
He was interacting with students at the annual 'confluence' of Indian Institute of Management, Ahmedabad (IIM-A).
Earlier in his speech, he said, "The coming decade will be crucial for the country as it needs to maintain decent growth rate of 8 to 9 per cent. Then only India's GDP will grow and by 2025 it will be middle income generating country. Stability is required."
On the 'growth versus equity' debate, the former RBI governor said, "You cannot compartmentalise growth and equity in the 21st century. If it would have been 17th or 18th century it could have been done as it was an industrial revolution first and later social reforms. They have to go side by side now. But at the same time we cannot sacrifice growth."
On government interventions in financial sector, Rangarajan said, "More markets does not mean less government, but it means different governments."
He also expressed hope that the Goods and Services Tax will be implemented in the next financial year.