9.5 per cent in the fiscal year that began on 1 April, which is slower that what it had the rate of 10.5 per cent that was forecast prior to the second deadly outbreak of COVID-19. However, the country’s inflation rate this year is expected to remain at the upper end of its target band, at 5.1 per cent.
Meanwhile, the MPC is not convinced that the easy measures that have been put in place since last year should be withdrawn since the current gains in price growth are believed to be triggered by supply-side problems, as well as higher commodity prices and a rise in fuel taxes. These views were reaffirmed by the RBI’s executive director Mridul Saggar who warned against the withdrawal of policy support prematurely, adding that there is a need to support growth “for now”, since “the flexible inflation targeting framework allows temporary deviation from the target so long as inflation is expected to be within tolerance bands”.
