Q. Consider the following statements regarding the Monetary Policy Committee (MPC) of India:
1.The Monetary Policy Committee is a statutory body constituted under the RBI Act, 1934 as amended by the Finance Act, 2016.
2.The committee is chaired by the Finance Minister of India and is responsible for targeting wholesale price index (WPI) inflation.
Which of the statements given above is/are correct?
Answer: A
Notes:
Explanation:
- The MPC is a statutory body formed by amending the RBI Act, 1934 through the Finance Act, 2016. It is tasked with setting the benchmark interest rate (repo rate) and guiding monetary policy.
- The RBI Governor, not the Finance Minister, is the ex-officio chairperson of the MPC. Also, the MPC targets Consumer Price Index (CPI)-based inflation, not WPI.
Source: Laxmikant (Polity)
