The RBI has brought inflation control to the forefront of its agenda.

Pilloried for going soft on prices, the central bank sharply raised the inflation forecast for the year and warned it would withdraw its accommodative stance if inflation strayed too far away from the target.

The RBI has been prioritising growth over inflation for the last three years in an economy wobbling even before the pandemic.

Rising prices have now come to confront central banks globally particularly after Russia’s invasion of Ukraine that drove up commodity prices including crude. Central banks have tightened rates or resorted to policy normalisation .

The RBI chose to adopt a moderate view on inflation in its February policy even as retail inflation for the month at 6.07 per cent remained above its comfort level of 6 per cent.

The situation turned grim after Russia’s invasion of Ukraine . While MPC was expected to revise its inflation forecast, it surprised on the higher side with RBI governor Shaktikanta Das terming the revision on account of “war induced factors’’.

The RBI in its February meet had projected inflation to come at 4.5 per cent in 2022-23.

Based on the assumption of normal monsoon and average price of crude oil (Indian basket) at $100 per barrel, this has been raised to 5.7 per cent which is above analyst expectation of 5.5 per cent.

The RBI also lowered its growth projection to 7.2 per cent from 7.8 per cent because of the Ukraine war.

Das said that because of the war, the central bank has altered the sequence of priorities with inflation taking precedence over growth. “Since February 2019, we had been putting growth ahead of inflation, but this time we revised it as it's appropriate.’’ Das said.

“From being behind the inflation curve in February, they’ve managed a skillful pivot towards policy credibility in a tough context. This without going back on their promise to telegraph moves in advance/be calibrated,’’ Ananth Narayan, senior India analyst at Observatory Group,tweeted.

The RBI Governor said in a televised address that since its February meeting which had projected a moderating path for inflation during the current fiscal, there has been heightened geopolitical tensions which have upended the earlier narrative and considerably clouded the inflation outlook for the year. ``Given the excessive volatility in global crude oil prices since late February and the extreme uncertainty over the evolving geopolitical tensions, any projection of growth and inflation is fraught with risk, and is largely contingent upon future oil and commodity price development.. The situation is dynamic and fast changing and our actions have to be tailored accordingly’’, he added.