Govt suggests more flexible timeline to inflation targeting

The government suggested whether the country needed a more flexible timeline for its inflation targets given the need to help indebted companies lower their debt levels, according to its mid-year economic report out on Friday.

"How can borrowing costs be lowered without jeopardising the medium term inflation objective?" the government said in the report, authored by Chief Economic Adviser Arvind Subramanian.

"Is there a case for a more gradual glide path or greater flexibility in interpreting the inflation objective?"

The Reserve Bank of India Governor Raghuram Rajan has set a target for consumer inflation of 5 per cent by March 2017 and 4 percent in the medium term, as part of his "glided path" approach to monetary policy.

Analysts have said achieving those objectives could be challenging given India's history of volatile food prices.