Maintaining 4% inflation appropriate for India: RBI Paper

Maintaining 4% inflation is appropriate for India as targeting a lower rate could impart deflationary bias to the monetary policy, said a Reserve Bank paper. Under the current dispensation, the RBI has been mandated by the government to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side. The paper has found a steady decline in trend inflation to 4.1-4.3% since 2014.