Decoding MPC's shifting stance on inflation

Education inflation in April had actually risen up to 5.32% from 5.2% in March

Over the course of the last two monetary policy reviews, there has been a marked shift in the monetary policy committee’s (MPC’s) assessment of the inflation dynamics in India.

Not only has the committee lowered its inflation forecast for FY18, but its assessment of the risks to inflation has also seen a change. 

Take the case of services inflation.

Based on data till February, the April policy statement had argued that “underlying inflation pressures persist, especially in prices of services”.

Two months later, it now says that “inflation in respect of services embedded in transport and communication, education, recreation and health