Ashima Goyal pitches for reviewing inflation target

The central government needs to review inflation target in the face of global trends, according to Monetary Policy Committee (MPC) external member Ashima Goyal. The government decides the inflation target for the rate-setting panel for a period of five years. At present, the consumer price index inflation target has been kept at four per cent with a tolerance band of two percentage points on either side. At the time the inflation target was set, the global rate of inflation was much lower. However, given that prices in the rest of the world are on a rise, Goyal stated that long-term inflation target must be reviewed or else there would be no inflation gap between India and the rest of the world.