Reserve Bank of India Governor Raghuram Rajan said the government has taken the momentous step of both setting a Consumer Price Index based inflation objective for the central bank as well as setting up an independent monetary policy committee (MPC).
"We intend to ensure these frameworks and institutions work as they should in producing a low inflation future for India," he said in a speech in Mumbai.
Concluding his speech, Rajan said, "What is happening today is truly revolutionary - by focusing on low inflation, we are abandoning the ways of the past that benefited the few at the expense of the many."
Rajan announced on Saturday his plan to go back to academics when his 3-year term ends in September.
"In the days ahead, a new governor, as well as the members of the monetary policy committee will be picked. I am sure they will internalize the frameworks and institutions that have been set up, and should produce a low inflation future for India," Rajan said today.
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