Excluding food from RBI's inflation framework may not have many takers

Headline numbers best communicated to common man; Govt needs to step up supply management

Excluding food inflation from the Reserve Bank of India’s (RBI’s) inflation-targeting framework, an idea the Economic Survey has floated, has not found favour with most economists and central-bank watchers.

Calling for a re-examination of the framework, the Survey said when food prices rose, inflation targets came under threat, prompting the central bank to appeal to the government to bring down prices of food products. This, in turn, prevents farmers from benefiting from the rise in prices.
 

One of the reasons for adopting the consumer price index as the RBI’s target is that it is easy to communicate to