Opinion | Why inflation targeting in the country is a rip-roaring success
Those who argue India does not need RBI to target inflation because it is already low have got things completely backward
By now, the well-established laundry list of the Narendra Modi government’s economic reform accomplishments in its first term in office reads: Goods and Services Tax (GST); Insolvency and Bankruptcy Code (IBC); and Monetary Policy Framework Agreement (MPFA) to enshrine inflation-targeting administered by a Monetary Policy Committee (MPC). Of this tripod, the first two legs are already shaky, as the GST has proved cumbersome and distorting, and fallen short of its revenue target, and the IBC has been all but gutted by unfavourable court rulings. Unfortunately, there is a serious danger that the MPFA, the one genuinely original and important policy reform of the Modi government that was not an inherited legacy from the previous government, will also be knocked away, and the tripod of reforms accomplishments will come crashing down.