Retail Inflation Target at 4% Extended Till 2031 by Government

Context: Retail Inflation Target

Government has asked the Reserve Bank of India to continue the inflation targeting framework with 4% inflation (2–6% band) for 2026–2031, extending the system started in 2016.

Key Points

India follows flexible inflation targeting → Government sets target → Reserve Bank of India maintains inflation → continuity till 2031 ensures stability.

Monetary Policy

• Reserve Bank of India controls inflation and interest rates

Monetary Policy Committee

• Decides repo rate
• 6 members → 3 Reserve Bank of India + 3 Government
• Statutory body → Reserve Bank of India Act, 1934 (amended 2016)
• Based on Urjit Patel Committee (2014)

Retail Inflation Target
Retail Inflation Target
PYQ – 2015, Ans – D
PYQ – 2022, Ans – C

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