Inflation targeting: Indian experience may have lessons for the world

Rather than butting heads with the fiscal authority, or meekly toeing its line, the central bank should insist on pragmatic, rules-based cooperation

“Did inflation targeting kill India’s growth story?” asks the headline of a recent article in the Mint newspaper. 

The idea of making an explicit numerical inflation goal the central bank’s primary objective came late to India. It was only in 2016 that the Reserve Bank formally took responsibility for keeping the rate of price change between 2% and 6% for five years. The clock runs out next March, but already some analysts are attacking the mechanism as anti-growth and in need of an overhaul. 

Similar questions have been asked in advanced nations since the 2008 financial crisis. Back then, interest