Search
Inflation Targeting Cannot Work in India: Former Governor Bimal Jalan
June 30, 2017
According to former RBI Governor Bimal Jalan, inflation target cannot work in India because the prices depend on several factors such as oil prices and rains on which the Central Bank has no control.
Jalan said that inflation targeting could be good for other countries such as the UK and the US but it’s pointless for India.
Talking about the RBI’s role in inflation targeting Jalan asked what’s the central bank to do if, for instance, the food prices shoot up by 40% due to rains.
As per the Monetary Policy Framework, the RBI is targeting an inflation rate of 4% with a margin of 2%.
