With these frameworks in place, the whole issue of policy mix becomes moot. In particular, interest rates are not adjusted to deal with problems of deficits and debts, and taxes and fiscal spending are not adjusted primarily to achieve an inflation objective.
The RBI now has a notified target for inflation of 4 percent, which a six-member Monetary Policy Committee has been enjoined and tasked to realise. We have to ensure that this objective is secured on a durable basis given the progress already made.