For the third consecutive meet since the outbreak of the Covid-19 pandemic, the Indian central bank has stayed away from providing growth and inflation forecasts. The lack of such forecasts, particularly inflation, makes it tougher to judge the future path of monetary policy, say economists, even though they acknowledge the difficulties in assessing the economic outlook amid disruptions caused bythe pandemic. India formally moved to an inflation targeting regime in 2015, under which the Monetary Policy Committee is mandated to bring down inflation to 4%, within a tolerance band of +/-2%. “Inflation forecasts, by acting as an intermediate target, play a special role in an inflation-targeting framework,” according to a research paper titled, “Inflation forecasts:
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