New Delhi: The Reserve Bank of India, for the first time since the implementation of monetary policy framework in 2016, will submit a report to the Government of India about its failure to keep the retail inflation below six per cent for the three consecutive quarters beginning January 2022, reported news agency PTI.
The monetary policy framework, which came into effect about six years ago, mandates the Reserve Bank of India (RBI) to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side.
In case the central bank fails to maintain the inflation target for three consecutive years, it is required — under Section 45ZN of the RBI Act — to submit a report to the government explaining the reason and spelling out the remedial measures it would take to check the price rise.
As per the PTI report, the apex bank has called a special meeting of the Monetary Policy Committee on November 3, to prepare its report on missing inflation targets to the government. The six-member rate-setting panel is headed by RBI Governor Shaktikanta Das.
"Under the provisions of Section 45ZN of the Reserve Bank of India (RBI) Act... an additional meeting of the MPC is being scheduled on November 3, 2022," the central bank said in a statement on Thursday, quoted by the news agency.
Section 45ZN of the RBI Act deals with failure to maintain inflation targets.
Governor Das had earlier said the central bank will not make the report public. It is not clear if the government too would like to keep the report confidential or make it public for wider discussions and deliberations, he had said.
To tackle price rise, the government in 2016 gave a mandate to the RBI to keep retail inflation at 4 per cent with a margin of 2 per cent on either side for a five-year period ending March 31, 2021.
Section 45-ZA of the RBI Act, 1934 requires that the central government shall, in consultation with the RBI, determine the inflation target in terms of Consumer Price Index (CPI), once in every five years.