Govt not to make RBI report on MPC's first-ever inflation failure public

MPC is said to have failed to achieve inflation target if average CPI inflation falls outside 2-6% range for three straight quarters. This was the case in the three quarters from Jan to Sept of 2022

The government will not make the Reserve Bank of India’s report on failure to achieve its inflation mandate public, Pankaj Chaudhary, minister of state in the finance ministry said in Parliament on Monday.

“RBI has furnished a report to the central government, as mandated under Section 45ZN of the RBI Act, 1934 and Regulation 7 of RBI Monetary Policy Committee and Monetary Policy process Regulations, 2016,” the minister said.

“The said provisions of the RBI Act, 1934, and regulations therein do not provide for making the report public,” he said.

Under the rules, RBI’s Monetary Policy Committee is deemed to have failed to achieve its inflation target if average Consumer Price Index inflation remains outside of the 2-6 per cent range for three successive quarters.

This was the case in the three quarters from January to September of 2022, marking MPC's first-ever inflation failure since its inception in 2016.

CPI inflation averaged 6.3 per cent in January-March, 7.3 per cent in April-June and 7 per cent in July-September of 2022, the minister said.

On November 3, a separate meeting of the Monetary Policy Committee was held to discuss and draft the report to be sent to the government.

Inflation in India rose sharply during the initial phase of the Covid-19 pandemic in 2020, as restrictions on movement severely disrupted supplies. Russia’s invasion of Ukraine this February exacerbated upside risks to domestic inflation as global commodity prices surged following the war.