However, there is an influential view that our economy will be better served if the Reserve Bank becomes a pure inflation targetter. The argument is that inflation hurts much more in a country like India with hundreds of millions of poor people and that the Reserve Bank will be more effective in combating inflation if it is not burdened with other objectives. 18.
This argument is contestable. Inflation targetting is neither desirable nor practical in India, and for several reasons. (i)  In an emerging economy like ours, it is not practical for the central bank to focus exclusively on inflation oblivious of the larger development context. The Reserve Bank needs to balance between growth, price stability and financial stability.