Mumbai: The Reserve Bank of India (RBI), under its Governor, Mr Urjit Patel, is focused on achieving the target inflation level of four per cent within a band of two-six per cent, which is meant to absorb temporary shocks. Market experts are of the opinion that the 4 per cent inflation target does not provide the flexibility necessary for an economy that is estimated to grow by 8 per cent annually. However, officials of the monetary policy committee (MPC) claimed that though the RBI is aiming at price stability, it also accounted for the growth objective while fixing the inflation target. Also, inflation rate is far from becoming an issue as the economy is yet to accelerate meaningfully, as per Mr Indranil Sengupta, Economist and Co-Head, India Research, Bank of America Merrill Lynch. An official of the MPC concluded by saying that RBI's credibility to control inflation should not be doubted, failing which producers can start hiking prices which can shoot up inflation expectations, that are to be kept well under control.
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