Maintaining that the Indian economy was resilient to oil price shocks, Reserve Bank of India Governor Y V Reddy on Wednesday said the oil prices needed to be closely monitored, though it is not a disturbing factor.

Indian economy is resilient to oil prices shocks and the inflation is expected to fall to 4-4.5 per cent, Reddy told reporters on the sidelines of a lecture organised by the National Institute of Bank Management in Pune.

India has benefitted from globalisation and liberalisation, the governor said at a lecture themed 'A turbulent surge? International capital flows and the Indian policy response' which was delivered by IMF first deputy managing director Anne Krueger.

However, at the same time he cautioned that while undertaking economic reforms, care has to be taken to see that there was no social disruption.

Reddy said in view of the prevailing 'feel good factor', this was the best time for reforms. "The ideal time for reforms are when the times are good. Reforms are easier made in good times than in crisis situation," he added.

He said the growth rate can be accelerated if "we take steps in fiscal adjustment."

Reddy said: "In the earlier times, India had strong consensus for weak economic reforms, now we have strong consensus for reasonably strong economic reforms."

Krueger expressed concern over the fiscal deficit of India and said concerted steps need to be taken to address them if India has to progress.