India

India pursued a varying set of objectives with a range of gradually changing instruments, and eventually adopted inflation targets.

Years Targets and attainment Classification
1974-2014 exchange rate initially pegged but for most of period is adjusted frequently and in varying ways; initially some state planning but some autonomy for banking system, planning weakened by liberalisation over time, particularly from early 1990s; fiscal dominance always possible but in practice under some control; monetary policy instruments gradually shift over period from direct to indirect; central bank has developmental responsibilities but increasingly serious price stability concern; some implicit/explicit monetary targeting 1985-6 to 1997-8, target achieved only four (separate) years, replaced in 1998 by multiple indicators approach loosely structured discretion LSD
2014-16 2014 adoption of ‘glide path’ down towards medium term inflation  target, targets met though inflation expectations above target; measures to improve monetary transmission loose converging inflation targeting LCIT
2017 formal adoption of flexible IT August 2016, target met full inflation targeting FIT

Selected IMF references: RED 1986 pp25-8; RED 1988 pp14, 18-19; MTP 1990 chs. II, VI; BPs 1995 chIV; SI 2000 chs V, VI; SR 2015 pp8-10; SR 2016 pp12-14; SR 2017 pp15-17.

Additional sources: Mohanty and Mitra (1999); Reserve Bank of India (2013), ch4 especially Annex 4.12, ch14 especially Annex 14.1.

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