the target for inflation is to be achieved over a medium term horizon rather than at a point in time to mitigate any output effects that disinflation could entail. furthermore, the target itself is set within a band or range in acknowledgement of potential supply shocks that well up outside monetary policy ’ s realm. accountability for failure to ensure the inflation band is generally defined, but after taking into account the various lags characterising the operation of monetary policy. in india, the amended rbi act defines the metric for the inflation target as the year - on - year change in the monthly consumer price index ( cpi ). the numerical inflation target has been set by the government at four per cent, with an upper tolerance level of 6 per cent and a lower tolerance level of 2 per cent, internalising flexibility. the amended rbi act has also specified accountability norms for dealing with failure to achieve the inflation target while building in recognition of the lags inherent in the conduct of monetary policy. it defines failure as average inflation breaching the tolerance band for three consecutive quarters, not instantly. although concerns about inflation had dominated monetary policy over the past decades in deference to a societal intolerance threshold, such an explicit commitment to a numerical inflation target as the centre - piece of policy had never been made. it was veritably a baptism by fire for the mpc, the new kid on the block in a cross - country sense of the term. the amendment to the rbi act, the inflation target and tolerance band around it, and accountability with respect to failure to achieve the target were notified in the gazette of india during may - august 2016. they were widely telegraphed and occupied many media bytes. what was little noticed, however, was that it was only on september 29, 2016 that a press release of 1 / 8 bis central bankers'speeches the government of india ( goi ) informed the world about the appointment of the mpc. just one working day later, the mpc plunged into its work and on october 4, it issued its first resolution, unanimously backed. many ‘ firsts ’ surround that debut. as the statutory semi - annual monetary policy report ( mpr ) of october 2016 noted : “ for the first time in its history, the rbi has been provided the explicit legislative mandate to operate the monetary policy framework of the country. the primary objective of monetary policy has also been defined for the first time. the amendments also provide for the constitution of a monetary policy committee that shall

k c chakrabarty : revving up the growth engine through financial inclusion address by dr k c chakrabarty, deputy governor of the reserve bank of india, at the 32nd skoch summit, mumbai, 6 june 2013. * * * 1. mr. montek singh ahluwalia, deputy chairman, planning commission ; mr. u. k. sinha, chairman, sebi ; mr. sameer kochhar, chairman, skoch group ; ms. stuti kacker, secretary, department of disability affairs, ministry of social justice and empowerment ; mr. s. s. tarapore, distinguished fellow, skoch development foundation ; ms. chitra ramkrishna, managing director and ceo, nse ; mr. bhaskar pramanik, chairman, microsoft corporation ( india ) ; delegates to the summit ; members of the print and electronic media ; ladies and gentlemen. it is a pleasure and privilege for me to be present here today at the inaugural session of the 32nd skoch summit on the theme of “ regaining 8 % growth with equity ”. i find the theme of the conference particularly relevant now as the temporary loss of growth momentum provides us an opportunity to recalibrate our growth strategies to ensure that the benefits of future economic growth are shared by all sections of the society, particularly, the poor and excluded groups. this objective needs to be at the core of any strategy that we adopt to rekindle the growth momentum. hence, i congratulate skoch for choosing this particular theme for its summit. 2. considering the illustrious and respected bevy of speakers who would be sharing their views on regaining the higher growth trajectory during the day, i would concentrate on highlighting some of the recent initiatives that we have taken to ensure that the objective of equitable growth is achieved through financial inclusion ( fi ) particularly, inclusion of the poor and marginalised sections of the society. i would also share some of the challenges that currently hinder our fi initiatives. our approach to financial inclusion 3. we have sought to adopt a structured and planned approach towards fi by not just focussing on improving access to financial services but also encouraging demand for financial services through financial literacy initiatives. some of the defining features of our approach to fi are : we have adopted a bank - led model for fi, but have permitted non - bank entities to partner banks in their fi initiatives. we have encouraged banks to leverage technology to attain greater reach and penetration while keeping the cost of providing financial services