EDEN IAS

NEWS IMPULSE – GOL APPOINTS MONETARY POLICY COMMITTEE MEMBERS| 06 OCTOBER

<p style=”margin-bottom: 13px; text-align: center;”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><b><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”>Source &ndash; LIVEMINT</span></span></span></b></span></span></span></p>

<p style=”margin-bottom: 13px; text-align: center;”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><b><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”>GS Paper &ndash; 3</span></span></span></b></span></span></span></p>

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<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><b><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”>Context</span></span></span></b><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”> – </span></span></span><span style=”font-size:12.0pt”><span style=”background:white”><span style=”line-height:150%”><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”><span style=”color:#090909″>the Government of India appointed economists Jayant R Varma, Shashank Bhide and Ashima Goyal as members of Monetary Policy Committee (MPC).</span></span></span></span></span><span style=”font-size:12.0pt”><span style=”background:white”><span style=”line-height:150%”><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”><span style=”color:#212121″> The Appointments Committee of the Cabinet (ACC), headed by the prime minister, approved the names,</span></span></span></span></span></span></span></span></p>

<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><b><span style=”font-size:12.0pt”><span style=”background:white”><span style=”line-height:150%”><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”><span style=”color:#212121″>Highlights </span></span></span></span></span></b></span></span></span></p>

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<li style=”margin-left:8px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”background:white”><span style=”line-height:150%”><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”><span style=”color:#212121″>As per the RBI Act, the three new members would have four-year terms.</span></span></span></span></span></span></span></span></li>
<li style=”margin-bottom:13px; margin-left:8px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”background:white”><span style=”line-height:150%”><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”><span style=”color:#212121″>As per the RBI Act, the external members can hold office for a period of four years and are not eligible for re-appointment.</span></span></span></span></span></span></span></span></li>
<li style=”margin-left:8px”><span style=”font-size:12pt”><span style=”background:white”><span style=”line-height:150%”><span style=”font-family:&quot;Times New Roman&quot;,serif”><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”><span style=”color:#212121″>The other ex-officio members of the MPC are Reserve Bank Governor, Deputy Governor (in-charge of monetary policy) and one RBI officer to be appointed by the central board.</span></span></span></span></span></span></li>
<li style=”margin-left:8px”><span style=”font-size:12pt”><span style=”background:white”><span style=”line-height:150%”><span style=”font-family:&quot;Times New Roman&quot;,serif”><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”><span style=”color:#212121″>The MPC has been given the mandate to maintain annual inflation at 4 per cent until March 31, 2021, with an upper tolerance of 6 per cent and a lower tolerance of 2 per cent.</span></span></span></span></span></span></li>
<li style=”margin-left:8px”><span style=”font-size:12pt”><span style=”background:white”><span style=”line-height:150%”><span style=”font-family:&quot;Times New Roman&quot;,serif”><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”><span style=”color:#212121″>The external members of the MPC are appointed by the central government from amongst persons of ability, integrity and standing, having knowledge and experience in the field of economics, banking, finance or monetary policy</span></span></span></span></span></span></li>
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<p style=”margin-bottom:13px; margin-left:48px”><span style=”font-size:11pt”><span style=”line-height:150%”><span style=”font-family:Calibri,sans-serif”><b><span style=”font-size:12.0pt”><span style=”line-height:150%”><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”>What is MPC ?</span></span></span></b></span></span></span></p>

<p style=”margin-bottom:6px”><span style=”font-size:12pt”><span style=”background:#fcfcfc”><span style=”line-height:150%”><span style=”font-family:&quot;Times New Roman&quot;,serif”><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”><span style=”color:#333333″><span style=”letter-spacing:.25pt”>The RBI has&nbsp;<strong><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”>a government-constituted&nbsp;Monetary Policy Committee (MPC)</span></strong>&nbsp;which is tasked with framing monetary policy using tools like the repo rate, reverse repo rate, bank rate, cash reserve ratio (CRR). It has been instituted by the Central Government of India under&nbsp;<strong><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”>Section 45ZB of the RBI Act that was amended in 1934.</span></strong> Decisions will be&nbsp;<strong><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”>taken by majority vote with each member having a vote.</span></strong> <strong><span style=”font-family:&quot;Cambria&quot;,&quot;serif&quot;”>RBI governor&rsquo;s role:&nbsp;</span></strong>The RBI Governor will chair the committee. The governor, however, will not enjoy a veto power to overrule the other panel members, but will have a casting vote in case of a tie.</span></span></span></span></span></span></span></p>

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