Any decision on adjustment to the flexible inflation targeting (FIT) framework should be based on relevant facts such as pre- and post-FIT Indian inflation and growth performance. In the pre-FIT period, from the 1970s onwards, headline CPI inflation averaged 8.5 per cent. Post FIT, from 2014-15 onwards, the average was 5 per cent. Of course there were intra-period variations, but there is a clear reduction.

Time series charts show that despite large externally-driven fluctuations in WPI in the FIT period those in the headline CPI reduced. The more stable core or trend inflation has been around 4 per cent since end 2023. Research also shows the more volatile headline converges to core. Thus FIT has delivered lower inflation.

But the data also show that since the seventies, in periods of r

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