NEW DELHI: The Central Government has decided to continue with the retail inflation target of 4 per cent for the next five year cycle, spanning April 1, 2026 to March 31, 2031, reaffirming its commitment to price stability.
As per an official notification issued by the Ministry of Finance, the tolerance band around the target will remain unchanged, with an upper limit of 6 per cent and a lower threshold of 2 per cent. The decision was taken in consultation with the Reserve Bank of India under the provisions of the RBI Act, 1934.
The move ensures continuity in India’s inflation-targeting framework introduced in 2016, under which the Monetary Policy Committee (MPC) is entrusted with managing price levels through policy measures such as interest rate adjustments. This marks the second consecutive extension of the same inflation target by the Centre.
Recent data indicates that retail inflation remains within the prescribed range. The Consumer Price Index (CPI) recorded an inflation rate of 3.21 per cent in February 2026, with rural inflation at 3.37 per cent and urban inflation at 3.02 per cent. Food inflation also remained moderate, reflecting easing prices in key vegetables during the period.
Officials noted that maintaining the current target provides stability to monetary policy and helps anchor inflation expectations, supporting sustainable economic growth.
The government also highlighted that price data collection continues to be carried out extensively across urban and rural markets, ensuring reliable inputs for inflation assessment. The next CPI data release is scheduled for mid-April 2026.