What is the primary constitutional and statutory mandate of the Monetary Policy Committee (MPC) constituted under the Reserve Bank of India Act, 1934?

💡 Solution & Explanation

The Monetary Policy Committee is entrusted with the statutory responsibility of determining the benchmark policy rate required to maintain price stability while keeping in mind the objective of growth. Established following amendments to the Reserve Bank of India Act, 1934 in 2016, the six-member committee operates under a flexible inflation targeting framework set by the central government. Budgetary allocations and disinvestment fall under the purview of the Ministry of Finance, whereas non-banking financial company regulation is handled by separate departments within the central bank.