India is likely to keep the Reserve Bank of India’s inflation target anchored at 4% (within the 2–6% band) as the five-year framework comes up for review in March. Policymakers see the regime as effective amid easing CPI and stable growth, signaling continuity in monetary policy calibration.
India is expected to retain the current flexible inflation targeting framework, with a 4% midpoint and a 2–6% tolerance band, when the government resets the target for the next five years. Officials view the framework as successful in managing price stability through recent supply shocks, supporting macroeconomic predictability and prudent policy signals.
Recent data and policy commentary point to a benign inflation backdrop heading into Budget season: the Economic Survey flagged CPI easing toward target, while the RBI has projected FY26 inflation near 4%, with quarterly prints converging within the band indicating conditions supportive of steady policy rather than drastic changes.
Key highlights
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Target continuity: 4% midpoint with 2–6% band likely retained for next five-year cycle.
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Policy effectiveness: Framework credited with moderating volatility amid global and domestic supply shocks.
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RBI outlook: FY26 inflation projected at 4%; quarterly trajectory within 3.6–4.4%.
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Macro context: Economic Survey notes CPI drift toward target alongside stable growth.
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Budget lens: Continuity aids credibility and planning for fiscal-monetary coordination.
Sources: Moneycontrol; Financial Express; Outlook Business; Mint (LiveMint); ETBFSI; Press Information Bureau