Inflation and agency accountability

In tune with global thinking, India created a monetary policy committee to target inflation. Six years later, it's time to strengthen its accountability

Inflation in 2022 has been generally above 6 per cent, the upper bound of the notified inflation target. The government stated in Parliament recently that the Reserve Bank of India (RBI) had furnished a report, explaining its failure. On the question of making the report public, the government said that the law does not provide for it. As this column argues, there are good reasons for making this report public, if necessary, by amending the law.

What is the wise path forward? We need to engage in first-principles thinking on structuring the principal-agent relationship between Parliament and the central bank (CB).

Inflation