New Delhi

INDIA's government and central bank have agreed to commit to inflation targeting, in the biggest change to monetary policy since the country's economy was opened up more than two decades ago, putting priority on subduing almost chronically volatile prices.

In a document dated Feb 20 but published on the Finance Ministry's website on Monday, the two sides set a consumer inflation target of 4 per cent, with a band of plus or minus 2 percentage points, for the financial year ending March 2017.