Inflation target retained at same level for next 5 years, says economic affairs secretary Tarun Bajaj – Times of India

NEW DELHI: Economic affairs secretary Tarun Bajaj on Wednesday informed that the government’s inflation target has been retained at the same level for the next five years, that is till March 31, 2026.
Under the current dispensation, the Reserve Bank of India (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.
In a bid to keep inflation under specified level, the government in 2016 had decided to set up Monetary Policy Committee (MPC) headed by the RBI governor entrusted with the task of fixing the benchmark policy rate (repo rate).
The six-member panel, which had its first meeting in October 2016, was given the mandate to maintain annual inflation at 4 per cent until March 31, 2021, with an upper tolerance of 6 per cent and lower tolerance of 2 per cent.
In addition, Bajaj unveiled government’s borrowing plan for the first half of the financial year 2022.
The minister said that the Centre will borrow Rs 7.24 lakh crore in the first half of 2021-22 fiscal to meet resources to perk up the economy hit by coronavirus pandemic.
“In the Budget, we had announced that there would be a gross borrowing of Rs 12.05 lakh crore and net borrowing of Rs 9.37 lakh crore. In the first half of 2021-22, we would be borrowing Rs 7.24 lakh crore, which is 60.06 per cent of the gross issuances,” economic affairs secretary said.
On fiscal deficit, Bajaj said that FY21 fiscal deficit will be closer to the revised estimate of 9.5 per cent.
The Union Budget had pegged fiscal deficit at 6.8 per cent for the next fiscal, down from 9.5 per cent of the GDP in the current financial year.
(With inputs from agencies)

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