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Yes, it's not broken

Govt and RBI should fix potential policy risks to inflation

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Business Standard Editorial Comment New Delhi
The government is reportedly planning to loosen the inflation tolerance band for the Reserve Bank of India (RBI), which is due for a review in March next year. Inflation has been running above the given target for several months and the fear is that a monetary policy response can affect the ongoing recovery. However, a new working paper by RBI Director Harendra Kumar Behera and Deputy Governor Michael Debabrata Patra has advocated maintaining the 4 per cent inflation target. Although the paper does not represent the official view, it will not be easy for the central bank to take a