Did inflation-targeting kill India’s growth story?
Bad data may have led India’s first-ever MPC to tighten monetary policy for far longer than was required
In 2016, the Reserve Bank of India (RBI) signed an agreement with the Indian government that led to the creation of the first-ever monetary policy committee (MPC) in the country. Their mandate: to ensure inflation stayed in the 2-6% range over the next five years, with the target set at the midpoint, 4%. The agreement also mentioned that the MPC would take into account growth concerns while setting policy rates.