RBI’s Inflation Modelling Under Scrutiny as Manufacturing and Construction Drive Growth

The Reserve Bank of India (RBI) is facing criticism for persistent overestimation in its inflation modelling, even as industrial growth is driven by manufacturing and construction segments. Analysts argue the central bank’s models have lagged real‑time data, which shows robust activity in infrastructure and factory output but lower than expected price pressures. The critique comes amid calls for updated frameworks that better capture sector‑specific dynamics and supply‑side risks, signalling that policy‑makers may need to refine their approach to inflation forecasting and monetary guidance.