Yes, it's not broken

Govt and RBI should fix potential policy risks to inflation

The government is reportedly planning to loosen the inflation tolerance band for the Reserve Bank of India (RBI), which is due for a review in March next year. Inflation has been running above the given target for several months and the fear is that a monetary policy response can affect the ongoing recovery. However, a new working paper by RBI Director Harendra Kumar Behera and Deputy Governor Michael Debabrata Patra has advocated maintaining the 4 per cent inflation target. Although the paper does not represent the official view, it will not be easy for the central bank to take a