Government Will Not Public RBI’s Letter On Inflation

The central government on Monday said that it will not make public the Reserve Bank of India’s letter on inflation. This came as a reply to a question raised by a member of parliament in Lok Sabha. The state minister of finance Pankaj Chaudhary in a written reply said that the RBI Act of 1934, and the regulations therein do not provide for making the RBI report public.

MP Jayadev Galla had asked whether the RBI has missed the inflation target of 6 per cent in the past 3 quarters, whether RBI has submitted an explanation regarding the reason for missing the targets, and whether the Government proposes to make the said report public. 

In the reply, Pankaj Chaudhary said, “the average inflation was above the upper tolerance level of the inflation target, i.e. 6 per cent for 3 consecutive quarters during January-September, 2022.”

He said, “Yes sir, RBI has furnished a Report to the Central Government, as mandated under Section 45ZN of the RBI Act, 1934 and Regulation 7 of RBI Monetary Policy Committee and Monetary Policy process Regulations, 2016.” 

He further added, “the said provisions of the RBI Act, 1934, and Regulations therein does not provide for making the report public.”

Last month, the RBI’s monetary policy committee met to discuss the bank’s report to the government for having failed to meet its inflation targets for three straight quarters for the first time since it was set up in 2016.

Later, RBI Governor Shaktikanta Das had said, “I don’t have the privilege, authority and luxury to release it (the letter) to the media before even the addressee gets it. The first right of receiving the letter lies with the government. In due course, sooner or later, it will be out. Nobody is hiding anything from the public, but it is a question of time.”

The central bank has struggled to contain inflation within its legally mandated range of 2-6 per cent. Although in October, inflation eased to 7 per cent for the first time in three months.