The Monetary Policy Committee (MPC) was established to formalise inflation targeting. How many members constitute India’s MPC?

Correct option is B

Correct Answer: (b)
Explanation
· The Monetary Policy Committee (MPC) of India is constituted by 6 members.
· Its composition is balanced with 3 members from the Reserve Bank of India (RBI) and 3 external members appointed by the Central Government.
· The committee meets at least four times a year to decide on the policy interest rates (like the Repo Rate) required to achieve the inflation target.
Information Booster
· Chairperson: The Governor of the RBI serves as the ex-officio Chairperson of the MPC.
· Voting: Each member has one vote. In the event of a tie (equality of votes), the Governor has a second or casting vote.
· Mandate: The primary objective is to maintain price stability while keeping in mind the objective of growth. The current inflation target is 4% with a tolerance band of +/- 2%.
· It was constituted under the Reserve Bank of India Act, 1934, amended by the Finance Act, 2016.