India commits to inflation targeting

Central bank and inflation ministry agree historic move to rein in volatile price rises by setting consumer inflation targets

India's government and central bank have agreed to commit to inflation targeting, in the biggest change to monetary policy since the economy was opened up more than two decades ago, making a priority of subduing volatile prices.

In a document dated 20 February but published on the finance ministry website on Monday, the bank and government set a consumer inflation target of 4%, with a band of plus or minus 2 percentage points, for the financial year ending in March 2017.