International Journal of Social Science & Economic Research
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Title:
RBI SHOULD LOOK BEYOND INFLATION TARGETING AND ADOPT CREDITTARGETING AS WELL

Authors:
ANSHUL NEGI

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ANSHUL NEGI
Master’s student, Central University of Rajasthan

MLA 8
NEGI, ANSHUL. "RBI SHOULD LOOK BEYOND INFLATION TARGETING AND ADOPT CREDITTARGETING AS WELL." Int. j. of Social Science and Economic Research, vol. 6, no. 4, Apr. 2021, pp. 1174-1195, doi.org/10.46609/IJSSER.2021.v06i04.005. Accessed Apr. 2021.
APA 6
NEGI, A. (2021, April). RBI SHOULD LOOK BEYOND INFLATION TARGETING AND ADOPT CREDITTARGETING AS WELL. Int. j. of Social Science and Economic Research, 6(4), 1174-1195. Retrieved from https://doi.org/10.46609/IJSSER.2021.v06i04.005
Chicago
NEGI, ANSHUL. "RBI SHOULD LOOK BEYOND INFLATION TARGETING AND ADOPT CREDITTARGETING AS WELL." Int. j. of Social Science and Economic Research 6, no. 4 (April 2021), 1174-1195. Accessed April, 2021. https://doi.org/10.46609/IJSSER.2021.v06i04.005.

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Abstract:
India formally adopted a Flexible inflation targeting regime to target CPI inflation in 2016 as the primary objective of the Monetary Policy. Since then, the retail inflation has been well within 2- 6% range set by the Monetary Policy Committee, but the GDP growth has declined from 8.2% in 2016-17 to 4.2% in 2019-20. At the same time, Credit growth has also seen a major decline which led to credit crunch in the Indian economy. The mandate of MPC has come to an end in March 2021. In this context, the paper tries to explain the relationship between credit growth and GDP growth in the Indian Economy and hence recommend that the Monetary Policy Committee should also adopt a Credit targeting regime along with the already existing Flexible inflation targeting framework. The paper uses Johansen (1988) Cointegration tests to illustrate the longterm relationship between the two variables.

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