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India can tweak inflation target band if growth-inflation mix evolves, says RBI Deputy Governor Poonam Gupta
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India can tweak inflation target band if growth-inflation mix evolves, says RBI Deputy Governor Poonam Gupta

The Indian Express·George Mathew·27 days ago
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Reserve bank of India (RBI) Deputy Governor Poonam Gupta on Tuesday said India could perhaps consider tweaking the level of inflation and the tolerance band a bit if growth-inflation mix evolves as it has in the past ten years with robust growth, and lower and more stable inflation. “But if the global environment remains as challenging as it has been during the past six years, it would warrant both predictability and flexibility inherent in the existing framework,” she said at an NCAER seminar. The government, after consultation with the central bank, has notified the inflation target framework for a five-year period through March 31, 2031. As per the framework, the RBI has to keep inflation at 4% (+/-2%) from FY27-FY31. Gupta said the case for retaining the 4% target rests on several mutually reinforcing factors. “First, 4% target was as per the assessment of the RBI’s Expert Committee in 2014.…

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