Tag: ECO_1

Synopsis: Many economists are criticizing the RBI’s role in inflation targeting. They are suggesting alternatives to inflation targeting. Let’s have a look at them. Contents1 Background2 Why many people have criticised RBI’s role in inflation targeting?3 Alternative suggestions to inflation targeting:4 Why RBI should continue Inflation targeting? Background The central government confirmed the continuance of… Continue reading Alternatives to Inflation Targeting

Synopsis: Inflation is still a big worry for policymakers. That is why the government is still willing to retain the inflation targeting. Introduction The Finance Ministry will continue with the inflation-targeting framework. It will guide the interest rate decisions of the RBI’s Monetary Policy Committee over the five-year period. The Department of Economic Affairs notified… Continue reading Need of Continuing with Inflation Targeting

Synopsis: According to the Executive Director IMF, Surjit S Bhalla, Inflation targeting has been ineffective in controlling inflation. Moreover, it has also contributed to a decline in GDP growth because of high repo rates. About inflation targeting The concept of ‘Inflation targeting’ was got acceptance in New Zealand first. Later, 33 countries adopted it as… Continue reading Impact of inflation targeting in India

Synopsis: Inflation control will always be relevant. But there is no conclusive evidence that the policy of inflation targeting has worked in India. Background The RBI was tasked with a mandate of the inflation target of 4 percent with a 2% deviation either way in June 2016. This agreement between the centre and the RBI… Continue reading Relevance of Inflation Targeting in India

Synopsis: The recent January 2021 retail inflation data provides relief to monetary authorities. Consumer Price Index (CPI) stood at 4.06% which is a desired outcome for ensuring macroeconomic stability.  Background: The inflation had remained above the RBI’s threshold mark of 6% for six months till November. The ideal range of CPI is 2-6%. In January… Continue reading Factors affecting present inflation level in India

Synopsis: Retail prices of petrol and diesel have reached record highs in India. One major reason is a heavy tax on Petrol and diesel in India. Introduction  The price of petrol is touching Rs 89 per litre in Delhi and diesel reaching Rs 86.30 per litre in Mumbai. The government states that the reason behind… Continue reading Why prices of Petrol and Diesel are rising?