The Central Government is considering raising the inflation target to 5 percent from the current 4 percent, which may give the Reserve Bank of India (RBI) more space to cut policy rates.
The Centre may increase the swelling objective to 5 percent, which is a portion of the monetary policy framework, with a resilience level of positive and negative 2 percent from 1 April, Mint revealed.
The decision may be declared during the forthcoming Budget for the financial year 2022alongside other monetary measures, the report said. As per the RBI Act, 1934 the inflation target should be passed by Parliament.
“We anticipate that an agreement should arise soon as the public authority means to get it passed in the current Budget meeting,” a source told the Mint