'Inflation targeting irrelevant in Indian context'

Noted academic T N Srinivasan on Friday questioned the efficacy and relevance of Consumer Price Index-based inflation targeting, suggested by RBI Deputy Governor and his one-time student Urjit Patel, in the Indian context.

"I have serious reservations about its (CPI-based inflation targeting) relevance and applicability in the domestic context," Srinivasan, the Samuel C Park Jr Professor emeritus of economics at Yale University, said here. Srinivasan had taught Patel at Yale.

Delivering his keynote address at the convocation of Indira Gandhi Institute of Development Research, where RBI Governor Raghuram Rajan said Patel's plan was being discussed, Srinivasan was, however, quick to add that by questioning the theory he is not denying the efficacy of inflation thresholds in some Western countries.