Rajan Panel Proposes 4% CPI Target in India Policy Overhaul
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An Indian central bank committee proposed adopting a 4 percent consumer-price-inflation target by 2016 as part of a sweeping monetary-policy overhaul, a shift that signals elevated interest rates if adopted.
An independent monetary policy committee should set benchmark interest rates, the panel appointed by Reserve Bank of India Governor Raghuram Rajan recommended yesterday in a 130-page report. It also proposed the Indian government reduce its budget deficit to 3 percent of gross domestic product by March 2017, from a forecast of 4.8 percent this March.