Inflation targeting is neither desirable nor practical in India for a variety of reasons:  •  First, it is inconceivable that in an emerging economy like India, the central bank can drive a single goal oblivious of the larger development context. The Reserve Bank must be guided simultaneously by the objectives of price stability, financial stability and growth.
•  Second, food items which have a large weight (46–70 per cent) in the various consumer prices indices are subject to large supply shocks, especially because of the vagaries of the monsoon, and are therefore beyond the pale of monetary policy.