Budget India 2017 - Retail inflation is likely to be well below RBI's target of 5 per cent in the current fiscal as demonetisation would discourage any price headwind, the Economic Survey for 2016-17 said on Tuesday.
The new inflation targeting approach by the Monetary Policy Committee (MPC) and gains from macro-economic stability will help India consolidate gains on price control, meaning prices will be less susceptible to individual whims and caprice of governments, the Survey said.
"The outlook for the year as a whole is for CPI inflation to be below the RBI's target of 5 per cent, a trend likely to be assisted by demonetisation," said the Economic Survey presented in Parliament by Finance Minister Arun Jaitley.
In the current financial year so far, retail inflation stabilised around 5 per cent, while wholesale price-based inflation averaged around 2.9 per cent during April-December.
"Codified the institutional arrangements on monetary policy with the Reserve Bank to consolidate the gains from macroeconomic stability by ensuring that inflation control will be less susceptible to the whims of individuals and the caprice of governments," it said.(Read More)
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