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Budget 2021 | Centre considers proposal to raise inflation target to 5%: Report

Retail inflation, measured as Consumer Price Index (CPI), declined in December 2020 to 4.59 percent from 6.93 in November.

January 28, 2021 / 10:19 AM IST
(Image: Shuttershock)

(Image: Shuttershock)

The government is mulling to raise the inflation target to 5 percent from the current 4 percent, which may give the Reserve Bank of India (RBI) more room to cut policy rates.

The government might hike the inflation target to 5 percent, which is a part of the monetary policy framework, with a tolerance level of plus and minus 2 percent from 1 April, Mint reported.

The decision might be announced during the upcoming Budget for FY22, along with other fiscal measures, the report said.

Moneycontrol could not independently verify the story.