The government has set an inflation target of four per cent for the next five years. <br/><br/>Monetary Policy Committee, to be set-up soon, will have to adhere to the target till March 31, 2021. <br/><br/>A notification, placed in Parliament by Minister of State for Finance Arjun Meghwal has put to rest the speculation over the inflation target. <br/><br/>The government and RBI had last year reached an agreement on a monetary policy framework that had set the inflation target at four per cent, plus or minus two per cent. However, there was no legal backing to it. <br/><br/>The government in June notified rules for setting up the Monetary Policy Committee giving affect to amendments in the RBI Act. <br/><br/>The inflation target was not notified that time fuelling speculation that the government might change it. <br/><br/>Once the Committee is set-up, it will set policy interest rate with the objective of keeping inflation in this range.