 "inflation, fmcg")
For nearly three decades, India’s consumer price index (CPI) based inflation averaged close to 8 per cent, underscoring the limitations of its then-prevailing monetary policy framework, which relied on credit controls and a multiple-indicator approach.
This system was increasingly seen as inadequate for anchoring inflation expectations or guiding macroeconomic stability.
Recognising the need for a more credible and structured regime, India introduced the Flexible Inflation Targeting (FIT) framework in June 2016.
This reform followed amendments to the Reserve Bank of India (RBI) Act, 1934, which formally mandated the RBI to pursue price stability as its primary objective and established the
