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Inflation goals of RBI need to be relooked: Rathin Roy
Apr-18-2019

The member of Prime Minister Narendra Modi's Economic Advisory Council, Rathin Roy has expressed the need to relook over the Reserve Bank of India’s (RBI) inflation target after the elections, given that the current mandate expires at the end of March 2021.

Rathin Roy also stressed that the government needs to decide what sort of macroeconomic framework is needed going forward and noted that those discussions and decisions will take time and a new administration should therefore start immediately to get the process going.

Further, the economic adviser said that authorities will need to decide whether the inflation target band of 2 percent to 6 percent is too wide. He also pointed that the current targeting regime -a rather uniquely broad range of 400 basis points within which the RBI has sanction to operate- should become a little more disciplined. Besides, he suggested that the decision should also be made on what interest rate is required to keep inflation in the middle of the band.

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