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The Reserve Bank of India’s (RBI’s) decision to seek public comments on its inflation-targeting framework is welcome. Consultation is healthy — but before making changes to the framework, we should first ask: How well has the regime worked?
The RBI’s discussion paper (August 2025) declares flexible inflation targeting (FIT) a success. It notes that average inflation fell from 6.8 per cent pre-targeting to 4.9 per cent afterwards, with the pandemic and Russia-Ukraine shocks pushing it up temporarily. Overall, the RBI concludes that FIT has served India well.
To judge how well FIT
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