say the best is yet to come," he added.
Singh also complimented Subbarao saying he had served the country and RBI well. On growth-inflation balance, Subbarao said the first and possibly the most important debate was about balancing between growth and inflation in the policy context.
"This is a balance that both governments and central banks struggle with. In my view, this debate has been clouded by some oversimplifications.
"One such oversimplification is to say that governments are for growth and central banks are for price stability. Another oversimplification is to assert that there is a tension between growth and inflation, and that one necessarily has to play the trade-off between growth and inflation in policy making," he said.
Subbarao said RBI's monetary policy aimed at three objectives-price stability, growth and financial stability.
“To contend that the Reserve Bank is obsessed with inflation, oblivious to growth concerns, I think, is both inaccurate and unfair.
"The Reserve Bank is committed to inflation control, not because it does not care for growth, but because it does care for growth. There is any amount of evidence to show that an evidence to show that an environment of low and stable inflation is a necessary precondition for sustainable growth. How history will evaluate the Reserve Bank on its balanced commitment to growth and inflation is an interesting conjecture," the outgoing Governor said.
Referring to another big debate now in India and around the world on the fiscal dominance of monetary policy, he said in India the structural reforms piloted by Manmohan Singh as finance minister and Governors Rangarajan and Reddy and Montek Singh Ahluwalia as Finance Secretary had helped establish the autonomy of monetary policy free of fiscal policy compulsions.
On the challenges and way forward for RBI, Subbarao said one of the big challenges for it would be to learn to manage both economic and regulatory policies in a globalising world.
"Dr Jalan, as the Governor, showed extraordinary competence and leadership in insulating India from the impact of the Asian crisis in the mid-1990s. Dr Reddy had the courage of conviction to remove the metaphoric punch bowl before the party got wild," he said.
He said yet the global financial crisis was so virulent that it affected virtually every country in the world. Did the Reserve Bank learn from the sagacity of Dr Jalan and the wisdom of Dr Reddy to manage the current crisis?