What is the Monetary Policy Committee?
The Monetary Policy Committee (MPC) is the authority that is ultimately liable and responsible for deciding the benchmark policy interest rate (Repo Rate) in India. The committee regulates the repo rate as per the requirements of the targeted inflation rate. The first-ever MPC was assembled in 2016, under Section 45ZB of the amended RBI Act, 1934. Prior to the constitution of MPC, a Technical Advisory Committee (TAC) consisting of expert members in the field of monetary policy and public finance advised the Central Bank regarding the monetary policy. The TAC was dismantled post the formation of the Monetary Policy Committee.
Members of the Monetary Policy Committee
Initially, the government proposed a seven-member committee, consisting of three members from the Reserve Bank of India and four members as per the nominations of the government. Subsequently, after further negotiations, the current composition of six members, three from RBI and three nominated by the government, was constituted.
As per the Official Gazette notification of October 5, 2020, the following are the members of the Monetary Policy Committee:
Shaktikanta Das, Governor of the Reserve Bank of India—Chairperson, ex officio;
Dr. Michael Debabrata Patra, Deputy Governor of the Reserve Bank of India, in charge of Monetary Policy—Member, ex officio;
Dr. Mridul K. Saggar, One officer of the Reserve Bank of India to be nominated by the Central Board—Member, ex officio;
Prof. Ashima Goyal, Professor, Indira Gandhi Institute of Development Research —Member;
Prof. Jayanth R. Varma, Professor, Indian Institute of Management, Ahmedabad—Member; and
Dr Shashanka Bhide, Senior Advisor, National Council of Applied Economic Research, Delhi— Member.
The Monetary Policy Committee is deemed to meet at least four times a year and publish the decisions made thereafter. The MPC is rigorously working towards achieving the primary objective of monetary policy; which is to maintain price stability while sustaining the objective of growth.
This edition of econSHOT is proofread by Elizabeth Annie Sleeba . The thumbnail art is designed by Pranjal Sharma.
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