Central bank should adopt new CPI index for anchoring monetary policy: RBI Panel

22 Jan 2014 Evaluate

With an aim to strengthen the current monetary policy framework, the Reserve Bank of India (RBI) Expert Panel, headed by RBI Deputy Governor Urjit R Patel, has recommended the central bank to adopt the new Consumer Price Index (CPI) for anchoring the monetary policy. At present, the RBI determines its monetary policy stance on the basis of Wholesale Price Index (WPI) as it is the only measure of prices at a national level, as the CPI has traditionally addressed prices facing specific sections of the society.

The committee has emphasized that bringing down CPI inflation must be accorded primacy and set the inflation target at 4 percent with a band of plus or minus 2 percent around it. The RBI Panel suggested that the central bank should take measures to bring down the CPI inflation from the current level of 10 percent to 8 percent over a period of next 12 months and to 6 percent in the next 24 months, before formally adopting the recommended target of 4 percent inflation with a band of +/- 2 percent. The monetary policy decision making should be vested in a monetary policy committee (MPC) that should be headed by the Governor, it added. Further, the panel added that MPC will be accountable for failure to establish and achieve the set CPI inflation target, which will require the MPC to issue a public statement, signed by each member, stating the reason for failure, remedial actions proposed and the likely period of time over which inflation will return to the centre of the inflation target zone. Meanwhile, CPI inflation eased to a three-month low level of 9.87% for December 2013 on y-o-y basis as compared to record high level of 11.16% for the previous month of November 2013.

Referring to the price stability in the country, the panel has highlighted that the government should make efforts for achieving price stability as it affects the monetary policy transmission. The RBI panel also recommended some new instruments to be added to the tool kit of monetary policy adding that all fixed income financial products should be treated on par with bank deposits for the purposes of taxation and TDS. In order to make monetary policy framework more transparent and predictable, RBI Governor Raghuram Rajan had set up the panel in September. The main aim of the panel was to recommend what needs to be done to revise and strengthen the RBI monetary policy framework.

Create stable, long-term investment portfolio with strong, consistent stocks.

Start Research-backed Investing ...Now. Subscribe to Sapphire

About MoneyWorks4Me

MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

Our Vision

To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.

What Makes MoneyWorks4Me Different

Fiduciary-first advisory model.
As SEBI-registered IAs, we are legally and ethically bound to act in the best interests of our clients. We do not sell or distribute any financial products. This ensures our guidance is 100% unbiased and conflict-free.
Deep fundamental research + robust valuation discipline.
Built on more than 15 years of equity research, our framework combines quality assessment, intrinsic value estimation, and a sensible margin-of-safety approach.
Process—not predictions.
We don’t rely on guesswork or market timing. Instead, we focus on asset allocation, risk management, and long-term compounding.
Technology + Human Intelligence.
We believe a combination of both is essential for investing success. We constantly innovate and upgrade in-house tools, financial X-rays, and portfolio analytics so that our team of analysts and advisors are equipped with the best.
Partner with Clients.
We follow a DIWM (Do-It-With-Me) approach where we partner clients in setting goals, financial planning, educating on our investing process and share decision-enabling resources transparently with our clients who retain control on execution.

Our Approach: Ensuring compounding work its magic on client portfolio.

MoneyWorks4Me ensures this through:

Investing in stocks, mutual funds, debt, and gold
Quality-at-Reasonable-Price way of investing in stocks
Constructing Direct Stock Portfolios with Core, Booster, and Amplifier stocks
A Mutual Fund Portfolio that delivers consistent out-performance and meaningful diversification (low overlap)
Periodic review and rebalancing
Clear Buy-Sell-Hold, and Position-sizing frameworks

Name of the IA registered with SEBI:	The Alchemists Ark Pvt. Ltd.
Logo:
Trade/Brand Name of IA:	MoneyWorks4Me Investment Advisers
Brand Logo:
SEBI Registration Number:	INA000013323 Validity – May 16, 2019 – Perpetual
Registration:	Non-Individual
BSE Enlistment No:	1187
Address:	B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045
Compliance officer Details:	Name: Shrikant Jagtap Email: shrikant.jagtap@moneyworks4me.com Telephone: +919860359463 Address: Same as IA
Grievance Officer Details:	Name: Mukta Vaze Email: mukta.vaze@moneyworks4me.com Telephone: +91 98609 19463 Address: Same as IA
Principal Officer Details:	Name: Atharva Bhide Email: atharva.bhide@moneyworks4me.com Telephone: +91 91758 99463 Address: Same as IA
Standard Warning:	Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Disclaimer:	Registration granted by SEBI, enlistment with exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.