---
title: "Inflation Tolerance Band (2-6%): India's RBI Target"
description: "The Inflation Tolerance Band is India's 2–6% CPI target range, crucial for the RBI's monetary policy to maintain price stability and economic growth."
url: "https://modeldiplomat.com/learn/glossary/inflation-tolerance-band"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- India's inflation tolerance band is the 2–6% Consumer Price Index target range, with a 4% midpoint, that the Reserve Bank of India must keep inflation within under the flexible inflation targeting framework.
- What happens if the RBI breaches the inflation tolerance band?
- Is the inflation target 4% or the 2–6% range?
- Which inflation index does the band track?
- How long does the inflation target last and when is it reviewed?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

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## Timeline

1. 5 August 2016

   By a Gazette notification of , the Government set the target at 4% Consumer Price Index (CPI) inflation, with an upper tolerance limit of 6% and a lower tole…

2. 20 February 2015

   The framework formalised recommendations of the Urjit Patel Committee report on the Expert Committee to Revise and Strengthen the Monetary Policy Framework (…

3. 1 April 2021

   The target was reaffirmed unchanged for the period to 31 March 2026.

4. 31 March 2026

   The target was reaffirmed unchanged for the period 1 April 2021 to .

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Example

In 2022, the Reserve Bank of India, under Governor Shaktikanta Das, breached the 6% upper tolerance limit for three consecutive quarters and submitted its first Section 45ZN failure report to the Central Government, raising the repo rate to 6.50% by February 2023.

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