"...I think what has happened is opportunities for grand corruption has increased as growth has picked up," Rajan said while replying a query on impact of corruption on growth at an event organised by Citi-MIT Sloan here.
"High levels of corruption makes growth very difficult ...We should try to reduce is as far as possible," Rajan said.
India's long-term economic growth averaged around 3.5 per cent between the 1950s and the 1980s. The economy started growing above 5 per cent after 1996, following the 1991 economic reforms, which were started by the then Finance Minister Manmohan Singh.
The Chief Economic Advisor further said there are very few countries with zero corruption and many of those attained the status after becoming rich.
On whether India can also become zero corruption country, Rajan replied in affirmative.
"There is also culture in Scandinavian countries which is intolerant of corruption. Is that something that can be achieved in India. Yes, Singapore achieved it in about two decades but through a very rigorous process," he said.
It may be recalled the leaders at the 2011 G-20 Summit had reaffirmed their commitment to combat the menace of corruption and to provide a clean business environment.
The economist said it is important to make sure that the institutions of country keep progressing.
"Our institutions are taking notice, are paying attention. The Comptroller and Auditor General of India (CAG) is asking the right questions. The Central Vigilance Commission (CVC) is asking questions. That is forcing a change in institutions," Rajan said.