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Costs and Benefits of Inflation Targeting in India

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Meeting No: 158 840 8763
Password: inflation


This presentation examines various aspects of the inflation targeting (IT) framework in India. Factually, inflation did decline in India post the introduction of IT. First, we examine various determinants of inflation in India and attempt to assess the independent, ceteris paribus, role of IT in reducing inflation. Second, we examine inflation forecast errors of the central bank (RBI) pre and post IT. Third, we examine whether the presence of IT brought about lower real interest rates, and therefore higher GDP growth, in India? We conclude by summarizing the evidence in a cost-benefit analysis framework.

About the Speaker

Dr Surjit S Bhalla is the Executive Director IMF, representing India, Sri Lanka, Bangladesh and Bhutan. He holds a PhD in Economics from Princeton University. He is a former part-time member of Hon'ble Prime Minister Narendra Modi’s Economic Advisory Council. In addition, he served as Chairperson for the Ministry of Commerce High Level Advisory Group on Trade; Economic Adviser to the Fifteenth Finance Commission, Government of India. He is a regular Invitee to the Aspen Institute Program on World Economy, USA, 2002-present. He was also a Contributing Editor for Indian Express (2014-2019). He was Founder-Chairman of Oxus Research & Investments 1997-2017.

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