Rajan, who recently drew criticism for comparing Indian economy as 'one-eyed king in the land of blind', also said he has no problem with India's growth, but it can do better.
"In a free market, all it takes to buy what you want is money. You do not need a pedigree, a great family history, the right table manners, or the right fashionable clothings or looks," he said in his convocation address at the Shiv Nadar University here.
Making it easier for Dalits to start business can do more to social status than any reservation, he noted.
"Rather than prohibiting the use of money and wealth, let us think about increasing society's tolerance for its use," he suggested.
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Lamenting that income inequality within countries is on the rise, he said the need of the hour is providing effective access to school and healthcare, a non-discriminating job market with many jobs and equal opportunities for advancement regardless of gender, race or background.
On the country's GDP, he said: "I have no problem with India's growth. It is doing great. It could do better".
India has emerged as the fastest growing large economies in the world with a growth rate of 7.6 per cent in 2015-16. It is projected to expand by 7.5 per cent in the current fiscal.