MUMBAI: Reserve Bank of India Governor Raghuram Rajan today said the country cannot have a GDP growth of 9 per cent until it makes “tremendous investments” and improves supply situation that boosts demand, but warned against populist policies.

To a query on whether the country can have much higher levels of growth without inflation, Rajan said, “The answer is no. We have to create underlying supply conditions that would allow us to sort of have a much higher demand.”

To achieve 9 per cent growth, there is a need for large investments which could lead to higher demand, he said.

“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. So, what we need to do is not just boost demand but we need to boost supply also, which means a lot of work on a number of fronts which currently the government is engaged in,” Rajan said at an event here today.

He added however that reaching 9 per cent growth rate is a steady process and cannot be attained overnight.

“That (the 9 per cent growth) is certainly an aspiration we should have but we need to eliminate the supply constraints, including our human capital,” Rajan said.

However, he cautioned against populist policies, saying they are driven by a desperate need for growth while the fact is that the real ways of growth are really hard.

He also said that there is a need to improve the quality of human capital in the country.

On the G20 grouping, Rajan said, India does not have many good economists who could represent the country in various international fora and working groups.