Inflation target remains intact for Reserve Bank of India, focus will be on 4% till 2026-31

K NEW DESKTOP- New Delhi: The Central Government has once again maintained the retail inflation target for the Reserve Bank of India at 4 percent. According to the new notification, the Reserve Bank of India has been given the responsibility of maintaining inflation around this level from April 1, 2026 to March 31, 2031.

Along with this target, the government has also set an upper and lower limit of 2 percent. That means inflation rate should remain in the range of 2 to 6 percent. The purpose of this decision is to maintain stability and balance in economic policy.

In India, the system of formally setting inflation target was implemented in the year 2016. At that time, for the first time, the government had given a target of 4 percent to the Reserve Bank of India for 5 years, the period of which was till March 31, 2021. After this, it was taken forward in 2021 and now the same structure has been continued for the third time.

The notification issued by the Department of Economic Affairs on March 25 said that the government has set this target after consultation with the Reserve Bank of India. In this, 4 percent has been kept as the middle target, while the upper limit has been fixed at 6 percent and the lower limit has been fixed at 2 percent.

The responsibility of controlling inflation rests with the six-member Monetary Policy Committee of the Reserve Bank of India. This committee works to keep inflation within the prescribed limits through interest rates and other policy measures.

In the last decade, inflation in India has mostly remained within the fixed range, although there were fluctuations in it during Covid-19. According to the latest data, retail inflation stood at 3.21 percent in February, which is higher than 2.74 percent in January, but is still within the prescribed limit.

Experts believe that maintaining this target provides stability in policy making and gives a clear signal to investors that the government and the RBI are committed to keeping inflation under control.