New Delhi, Aug. 25 -- The Reserve Bank of India (RBI) has invited comments from stakeholders on a discussion paper on the next five-yearly review of its monetary policy framework. This framework, called India's flexible inflation targeting (FIT) regime, was adopted in 2016.

It was a landmark reform that established price stability as the primary goal of monetary policy. It was formalized through a contract signed between the government and the central bank which set a Consumer Price Index (CPI) inflation target of 4%, the mid-point of a tolerance band of 2-6%, and gave RBI a statutory mandate by changing the RBI Act. This institutionalized transparency and accountability aligned India's approach with global best practices. It was reaffir...