NEW DELHI: RBI monetary policy committee member Nagesh Kumar has suggested that there should be two inflation rates — one including food prices and the other without food prices —so that relevant rates could be taken into account for policy making.
Chief economic adviser V Anantha Nageswaran in the Economic Survey 2023-24 had pitched for excluding food inflation from the rate setting calls, saying that the monetary policy has no bearing on the prices of food items, which are dictated by supply side pressures.
“I think there is a healthy debate on what should be the target, whether overall headline inflation rate or inflation rate excluding the food products, which are, you know, very seriously affected by seasonal demand, supply mismatch,” Kumar said while responding to a question on suggestions made in the Economic Survey for excluding food inflation while setting benchmark interest rates.
The weightage of food in the overall consumer price inflation, which stands at 46%, was done in 2011-12, and needs to be revisited.
