Safeguarding Macroeconomic Stability

Institutional Commitment

  • Macroeconomic stability is a key goal for the Indian government and the Reserve Bank of India, achieved through strong output growth, price stability, and a robust external account.
  • The commitment to an institutional architecture supports macro stability.

Flexible Inflation Targeting

  • Flexible inflation targeting, introduced in FY16 within the band of 4 +/- 2 percent, helped control retail inflation, averaging 4.2 percent until FY20.
  • The Price Stabilization Fund (PSF) effectively managed price volatility in agri-horticultural commodities.

Challenges During Covid-19

  • Covid-19 posed challenges to keeping inflation within the 2 to 6 percent range.
  • Supply disruptions, geopolitical conflicts, and weather conditions affected fiscal ....
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