As MPC fails on CPI mandate, RBI's growth-inflation balance gets trickier

The central bank will now have to provide a report to the government explaining the reasons for the failure and the steps to be taken

On Wednesday, government data showed that India’s consumer price index-based inflation was at 7.41 per cent in September 2022. The data officially marks the failure of the Reserve Bank of India’s (RBI) Monetary Policy Committee to keep inflation within the mandated target range — for the first time since the six-member panel started to decide policy repo rate in October 2016. The RBI has to now give a report to the government. Business Standard decodes the steps ahead.

What is the RBI’s inflation target?
 

In August 2016, the government notified that the target for CPI inflation was 4 per cent,