Govt may retain inflation target

India is likely to retain the current inflation target of 4%, within a band of 2% to 6%, for the next five years starting April, a senior finance ministry official said.

"I think everyone is in agreement that the existing target should remain," the official told Informist. The inflation target for the Reserve Bank of India's Monetary Policy Committee is likely to be notified around mid-March after approval of the finance minister and from the Prime Minister's Office, the official said.

The current medium-term inflation target, which was notified in August 2016, ends on March 31.

According to the RBI Act, the government has to set the inflation target once every five years in consultation with the central bank.

The decision to retain the current inflation target for the next five years is "very much" in consultation with the central bank, the official said.

The RBI has for some time been arguing for retaining the current inflation target of 4% within a band of 2-6%.