• Aakash

Persistent inflation erodes purchasing power, creates uncertainty about economic decisions, distorts consumption choices over time and creates welfare losses. The poor get hit the hardest. The Reserve Bank of India (RBI) has adopted the flexible inflation-targeting (FIT) framework in the Indian context to strike a balance between price stability, economic growth and the health of the financial sector. The paper evaluates the effectiveness of monetary policy instruments, particularly the policy repo rate, in influencing the trend of consumer price inflation in the post-FIT period. The study is descriptive analytic and based on secondary data collected from the RBI, the Ministry of Statistics and Program Implementation, the International Monetary Fund (IMF) and related institutional archives for the fiscal years 2015-16 to 2023-24. It covers the MPC’s operational journey, Covid-19 pandemic macroeconomic shocks, an inflation surge and the controlled monetary tightening cycle of 2022-23. The empirical framework is based on descriptive statistics, trend decomposition, comparative benchmarking and exploratory correlation analysis. Research has indicated that the average headline inflation over the research period was 5.0 per cent and peaked at 6.7 per cent in 2022-23. Between May 2022 and February 2023, the RBI had responded by raising the repo rate cumulatively by 250 bps which helped bring down inflation to 5.4 per cent in 2023-24. The disinflation was largely a consequence of the disinflationary dynamics set in motion by the monetary policy tightening. These dynamics included the fall in aggregate demand and the anchoring of expectations. In contrast, the significance of the interest rate approach has been undermined due to structural constraints. Some of these are unpredictability of the food supply, dependence on energy imports, disruptions caused by climate change, fluctuations in the prices of foreign commodities and logistical hurdles. The results of the study show that the contribution of monetary policy will be to keep price stability but not enough. The integrated macroeconomic stabilization strategy will be centered on fiscal discipline, attempts to enhance agricultural efficiency, energy security, shifts in trade policy and supply chain modernization.

Monetary Policy Transmission, Inflation Targeting, Repo Rate, Consumer Price Index, Reserve Bank of India, Monetary Policy Committee, India, Supply-Side Inflation

"MONETARY POLICY EFFICACY IN INFLATION GOVERNANCE: VERIFICATION AFTER INDIA'S FLEXIBLE INFLATION-TARGETING REGIME", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.13, Issue 9, page no.a489-a497, September-2026, Available :http://www.jetir.org/papers/JETIR2609059.pdf

"MONETARY POLICY EFFICACY IN INFLATION GOVERNANCE: VERIFICATION AFTER INDIA'S FLEXIBLE INFLATION-TARGETING REGIME", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.13, Issue 9, page no. ppa489-a497, September-2026, Available at : http://www.jetir.org/papers/JETIR2609059.pdf