(a) whether the Government has appointed all Members of the Monetary Policy Committee (MPC);
(b) if so, the details thereof along with their tenure in the Committee and if not, the reasons therefor;
(c) whether the MPC has tasked with deciding benchmark interest rates which the RBI Governor used to decide till now, if so, the details thereof; and
(d) whether the MPC will be able to contain inflation within the specified target level and if so, the details thereof?
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI ARJUN RAM MEGHWAL)
(a) & (b) Yes, Sir. The Monetary Policy Committee(MPC) of the Reserve Bank of India (RBI) has been constituted by the Central Government in accordance with the provisions of the Reserve Bank of India Act, 1934 (RBI Act) and has been notified in the Gazette of India, Extraordinary on 29.9.2016 as follows:-
(i) Governor of the Reserve Bank of India—Chairperson, ex officio;
(ii) Deputy Governor of the Reserve Bank of India, in charge of Monetary Policy—Member, ex officio;
(iii) One officer of the Reserve Bank of India to be nominated by the Central Board—Member, ex officio;
(iv) Shri Chetan Ghate, Professor, Indian Statistical Institute —Member;
(v) Professor Pami Dua, Director, Delhi School of Economics—Member; and
(vi) Dr. Ravindra H. Dholakia, Professor, Indian Institute of Management, Ahmedabad— Member.
The Members of the MPC referred to in clause (iv) to (vi) above shall hold office for a period of four years or until further orders, whichever is earlier.
(c) Yes, Sir. The MPC is entrusted with the task of fixing the benchmark policy rate (repo rate) required to contain inflation within the specified target level, which has been fixed for a period of 5 years upto March, 2021 by the Government at 4% with a range of +/- 2%. The decision of the MPC shall be binding on RBI.
(d) The MPC, in its policy resolution of October 4, 2016 noted that “...The Committee expects that the strong improvement in sowing, along with supply management measures, will improve the food inflation outlook. It notes that the sharp drop in inflation reflects a downward shift in the momentum of food inflation – which holds the key to future inflation outcomes – rather than merely the statistical effects of a favourable base effect. The Government has announced several measures to cool food inflation pressures, especially with regard to pulses. These measures should help in moderating the momentum of food inflation in the months ahead.... On balance, the Committee envisages a trajectory taking headline CPI inflation towards a central tendency of 5 per cent by March 2017”.