RBI Faces Mountainous Task: Keep Inflation at 4% Amid Iran War, LPG Crisis for 5 Years

• Reserve Bank of India assigned challenging task to maintain retail inflation around 4% for the next 5 years, until March 2031.
• Inflation target includes a 2% margin, meaning it should not exceed 6% or fall below 2%.
• The government's Department of Economic Affairs re-issued the directive, maintaining the same inflation target as before.
• This is the second time the government has retained the 4% inflation target with a 2% fluctuation for a five-year period.
• RBI's Monetary Policy Committee has largely succeeded in meeting the target over the past decade, except during COVID-19.