The Hindu Business Line : Inflation target

There is a revived debate on the introduction of inflation target. But the truth is that it has been informally in existence for more than two decades. It is not yet written into law. Thus, money supply estimates are made by the central bank to accommodate an `acceptable' inflation rate of 5 per cent.

Those who talk about the need for a 5-per-cent rise in prices year after year for promoting growth should think of the millions of subsistent farmers who produce foodgrains for self-consumption. The share of agriculture in gross domestic product has been declining but the proportion of the population dependent on agriculture for a living has not.

A. Seshan

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