Economy · 11 Aug 2026

RBI core inflation precious metals CPI

Which one of the following statements regarding India's inflation targeting framework and recent CPI data is NOT correct?

AThe RBI's statutory inflation target is 4%, within a tolerance band of 2-6%, under Section 45ZA of the RBI Act, 1934.
BHeadline CPI inflation in June 2026 was below the RBI's core inflation figure that excludes food, fuel and precious metals.
CThe RBI kept the policy repo rate unchanged at its early August 2026 meeting despite headline CPI breaching its 4% target.
DA majority of items in the CPI basket recorded price increases in June 2026 compared to a smaller number in February 2026.
This question is based on: Why the RBI's Favourite Inflation Number Excludes Almost Everything That's Actually Rising
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About this question

Why in news

The RBI held rates steady citing a narrow "core inflation excluding precious metals" metric as benign, even as headline CPI breached its 4% target at 4.38% in June, prompting economists to question what the central bank is actually targeting.

Why for UPSC

A "Not Correct" question sparingly tests precise numerical relationships between multiple disclosed figures - exactly the kind of quantitative comparison UPSC uses to check whether an aspirant read the data carefully rather than just recalling a headline.

Prelims summary

RBI's statutory target is 4% (2-6% band) under Section 45ZA. June 2026 headline CPI (4.38%) was well above the narrower core-ex-precious-metals figure (2.5%), even as price pressure broadened across the CPI basket.

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