What is the current inflation target set by the Government of India in consultation with the RBI?

Correct Answer: 4% with a band of 2% (i.e., 2% to 6%)

Subject: economics

• 4% with a band of 2% (i.e., 2% to 6%)
• 5% with a band of 1% (i.e., 4% to 6%)
• 3% with a band of 3% (i.e., 0% to 6%)
• 6% with no band

Explanation: • <b>Key Fact</b> Under the RBI Act, the current inflation target is 4% with a band of +/- 2%. • <b>Supporting Detail</b> This target is determined in terms of the Consumer Price Index (CPI) every five years. • <b>Related Concept</b> The RBI's Monetary Policy Committee (MPC) decides policy rates to maintain this. • <b>Why wrong options are wrong</b> The official mandate is strictly 4 (+/- 2). • <b>Exam Trick</b> Target = 4%. Tolerance = 2% to 6%. • <b>Additional Info</b> In India, inflation is officially measured by MoSPI.

Loading Gyaanify...