When the inflation target reset date for another five-year period was fast approaching (starting April 1, 2021), a lively debate surfaced outside the Reserve Bank on the appropriateness of the 4 per cent inflation target with the +/- 2 per cent tolerance band.
The researchers of the RBI undertook a comprehensive review of the monetary policy framework, examining all relevant issues, and recommended retention of the same target for the next five years. We accepted this recommendation and sent proposals to the government accordingly.