Inflation data under scrutiny after RBI policy maker questions its efficacy

Ravindra Dholakia's questions the data at a time when inflation continues to undershoot the RBI's forecasts

India’s inflation data is once again under scrutiny after a member of the central bank’s monetary policy panel raised questions about its efficacy.

There was an urgent need to modernize the way changes to prices are being calculated by the government as well as the way inflation expectations are being surveyed by the Reserve Bank of India, Ravindra Dholakia, a dovish member of the panel, wrote recently in the Economic and Political Weekly.

“If a country accepts inflation-targeting framework, it has to be extremely serious and cautious about the correct and realistic measurement of its inflation rate,” Dholakia said. “Inflation-targeting framework without