, Columnist
Time to Rethink Inflation in India
The central bank's new target looks at the wrong measure.
Lowering food prices will require extensive reforms.
Photographer: Indranil Bhoumik/Mint/Getty ImagesThis article is for subscribers only.
Any day now, India's government is set to announce an official inflation target for the first time -- a major step in the modernization of its economic institutions, particularly the central bank. The idea has been proposed and debated for years, including in a much-discussed 2008 report written for a previous Indian administration by Raghuram Rajan, now governor of the Reserve Bank of India. Rajan's proposals have now been formalized, after much back-and-forth between the RBI and the government, in a formal monetary policy framework that includes a mandate for the RBI to target a specific inflation rate.