Overview
- Poonam Gupta, speaking Tuesday at an NCAER seminar, said India could consider cutting the 4% inflation goal and tightening the plus‑or‑minus 2% band in the next review if robust growth and stable prices continue for several years.
- The government in March kept the current framework in place through March 31, 2031, asking the RBI to target headline consumer inflation at 4% within a 2% to 6% range.
- Gupta cautioned that frequent external shocks, such as energy and geopolitics, still argue for the predictability and flexibility of the existing band if global strains persist.
- The RBI projects headline inflation to average about 4.6% in FY27, and it plans to refine how it tracks core inflation and to step up plain‑language communication.
- Since 2016, inflation targeting—setting a clear CPI goal to guide interest rates—has lowered average inflation from about 8.1% to 4.6% and reduced volatility, and most consultation feedback backed keeping the 4% anchor and headline CPI focus.