Inflation band in India can be narrowed to 1% - 1.5% from 2% to improve policy effectiveness: Report

JM Financial has suggested narrowing Indias inflation tolerance band to 1–1.5% from the current 2% for stronger policy impact. The RBIs framework targets 4% inflation within a 2–6% range. A tighter band, similar to peers like Indonesia, could boost credibility. Headline inflation remains more relevant for India due to foods high weight in household budgets.