Which index is currently utilized by the Reserve Bank of India as the primary anchor for its inflation-targeting framework?

💡 Solution & Explanation

The Reserve Bank of India utilizes the Consumer Price Index Combined as the primary inflation anchor under its flexible inflation-targeting framework, targeting a central rate of four percent. Alternative metrics such as the Wholesale Price Index measure producer-level price movements and are no longer used as the sole monetary policy anchor. This shift followed the recommendations of the Patel committee report on monetary policy reforms. Price stability is the paramount mandate of the central bank under the amended Reserve Bank of India Act.