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NDA 2020 GAT · General Knowledge · Indian Economy · hard

The inflation targeting framework of the Reserve Bank of India, adopted in 2016, uses which index as the nominal anchor?

Single correct option

The inflation targeting framework of the Reserve Bank of India, adopted in 2016, uses which index as the nominal anchor?
  1. A. Wholesale Price Index
  2. B. Index of Industrial Production
  3. C. Consumer Price Index (combined)
  4. D. GDP deflator
Show answer and solution

Answer: (C) Consumer Price Index (combined)

Under the Monetary Policy Framework Agreement with the government, the target of 4 per cent with a tolerance band of plus or minus 2 per cent applies to CPI (combined) inflation. WPI is not the anchor, and IIP measures industrial output, not prices.
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Original question written in the NDA 2020 GAT pattern and checked twice for the correct answer. Not an official question paper. How we write and check questions · Corrections policy · Report a mistake