Optimize IAS
  • Home
  • About Us
  • Free Initiatives
    • Daily Practice Sheets
    • Daily Prelims Notes
    • Prelims Power Play
    • Mains Factly
    • Sunday Essay Sadhna
    • Mains Master Notes
  • Courses
    • Mains 2023
      • Mains 2023 (Static)
      • Ethics Masterclass 2023
      • Essay Masterclass 2023
    • Integrated Guidance 2024
      • ARJUNA PRIME 2024
    • Prelims 2024
      • Laqshya 2024
    • Mains 2024
      • DPS Prime 2024 (Daily Answer Writing)
  • Downloads
    • Important Topics List for Prelims 2023
    • Daily Prelims Notes Compilation
    • Daily Practice Sheet Compilation
    • PPP Compilation
    • PSIR Notes
    • General Studies Notes
    • UPSC Mains Previous Year Papers
  • Portal Login
  • Home
  • About Us
  • Free Initiatives
    • Daily Practice Sheets
    • Daily Prelims Notes
    • Prelims Power Play
    • Mains Factly
    • Sunday Essay Sadhna
    • Mains Master Notes
  • Courses
    • Mains 2023
      • Mains 2023 (Static)
      • Ethics Masterclass 2023
      • Essay Masterclass 2023
    • Integrated Guidance 2024
      • ARJUNA PRIME 2024
    • Prelims 2024
      • Laqshya 2024
    • Mains 2024
      • DPS Prime 2024 (Daily Answer Writing)
  • Downloads
    • Important Topics List for Prelims 2023
    • Daily Prelims Notes Compilation
    • Daily Practice Sheet Compilation
    • PPP Compilation
    • PSIR Notes
    • General Studies Notes
    • UPSC Mains Previous Year Papers
  • Portal Login

Monetary Policy Committee

  • July 27, 2020
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
No Comments
Print Friendly, PDF & Email

Subject: Economy

Context:

Monetary policy committee is soon to be reconstituted as the terms of three independent people on the panel expire at the end of next month and one internal member retired in June.

Concept:

  • Monetary policy refers to the use of monetary instruments under the control of the central bank to regulate magnitudes such as interest rates, money supply and availability of credit with a view to achieving the ultimate objective of economic policy

What is Monetary Policy Committee?

  • The Monetary Policy Committee (MPC) constituted by the Central Government under Section 45ZB of RBI Act determines the policy interest rate required to achieve the inflation target.
  • Accordingly, the Central Government in September 2016 constituted the MPC as under Governor of the Reserve Bank of India – Chairperson, ex officio;
  • The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth. Price stability is a necessary precondition to sustainable growth.
  • In May 2016, the Reserve Bank of India (RBI) Act, 1934 was amended to provide a statutory basis for the implementation of the flexible inflation targeting framework.
  • The amended RBI Act also provides for the inflation target to be set by the Government of India, in consultation with the Reserve Bank, once in every five years.
  • Accordingly, the Central Government has notified in the Official Gazette 4 per cent Consumer Price Index (CPI) inflation as the target for the period from August 5, 2016 to March 31, 2021 with the upper tolerance limit of 6 per cent and the lower tolerance limit of 2 per cent.
  • The MPC is required to meet at least four times in a year.
  • The composition of the MPC is as follows;
  • Governor of the Reserve Bank of India – Chairperson, ex officio;
  • Deputy Governor of the Reserve Bank of India, in charge of Monetary Policy –
    (Member, ex officio)
  • One officer of the Reserve Bank of India to be nominated by the Central Board – Member, ex officio;
  • Except ex-officio members, three independent members will hold the office for a period of 4 years or until further orders, whichever is earlier.
  • The quorum for the meeting of the MPC is four members. Each member of the MPC has one vote, and in the event of an equality of votes, the Governor has a second or casting vote.
economy Monetary Policy Committee
Print Friendly, PDF & Email
Loading

Recent Posts

  • Why is China digging a 10-km-deep hole into Earth’s crust? June 2, 2023
  • CBDT removes Fair Market Value (FMV) hurdle to Disinvestment June 2, 2023
  • NPAs linked to trade credit crisis June 2, 2023
  • IRDAI: Bima Sugam, Bima Vahaks and Bima Vistaar June 2, 2023
  • Mural of Akhand Bharat in Parliament stirs up row in Nepal June 2, 2023
  • Suspension of Operations (So0) Agreement June 2, 2023
  • NCERT in ‘rationalisation’ move drops periodic table chapter from Class X book June 2, 2023
  • U.S. and Taiwan ink trade deal as China issues warning June 2, 2023
  • Africa mulls legal options on ICC warrant against Putin June 2, 2023
  • Law Commission on Sedition June 2, 2023

About

If IAS is your destination, begin your journey with Optimize IAS.

Hi There, I am Santosh I have the unique distinction of clearing all 6 UPSC CSE Prelims with huge margins.

I mastered the art of clearing UPSC CSE Prelims and in the process devised an unbeatable strategy to ace Prelims which many students struggle to do.

Free Initiatives

  • Daily Practice Sheets
  • Daily Prelims Notes
  • Mains Factly
  • Prelims Power Play
  • Sunday Essay Sadhna

My Proven Strategy

  • Interview Strategy
  • Mains Strategy
  • Motivational
  • Prelims Strategy

Contact us

moc.saiezimitpo@tcatnoc

For More Details

Work with Us

Connect With Me

Santosh Pandey Quora Santosh Sir Telegram Santosh Sir Youtube Optimize IAS Instagram

Course Portal
Search