Mumbai: The Reserve Bank on Thursday sought public feedback on whether its monetary policy should continue to target 4 per cent retail inflation or set new parameters to boost growth while maintaining stability in the fast-growing large economy. While emphasising that the flexible inflation targeting (FIT) regime has been successful, the central bank is also looking at whether core inflation would be the best guide for monetary policy.

Following a Monetary Policy Framework Agreement with the government in 2015, India formally adopted the inflation targeting framework in 2016. The government has mandated the RBI to maintain a Consumer Price Index (CPI) inflation target of 4 per cent with a tolerance band of /- 2 per cent during 2016-21. The same parameters were retained for the subsequent five years (April 1, 2021, to March 31, 2026).

The RBI Governor-headed six-member Monetary Policy Committee (MPC) determines the policy rate required to achieve the inflation target. Against the backdrop of........

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