London: Leading NRI industrialist Lord Swraj Paul on Sunday hailed the decision of RBI Governor Raghuram Rajan to raise a key interest rate. "I congratulate the governor for his policy because he has not fallen to populism but is doing the best for the economy and the country. (In the) long-term, the economy needs correction. There is no better time than to do it now," Lord Paul said.

Rajan on Friday unexpectedly raised the policy rate by 0.25 per cent, the first increase in almost two years, to keep inflation under check. There were expectations that RBI would maintain a status quo on policy rates. "Sooner or later, we will have to create correction to the economy by bringing the current deficit down. The Food Security Bill is very good and also some of the other measures...for meeting the needs of the ordinary people of India, particularly the poor and the middle class. "Inflation must be kept down as that hurts these people most," he added.