Which of the following bodies is legally empowered to determine the policy interest rate required to achieve the inflation target under the Reserve Bank of India Act, 1934?

💡 Solution & Explanation

The Monetary Policy Committee established under Section 45ZB of the Reserve Bank of India Act is entrusted with fixing the benchmark repo rate to maintain price stability. Alternative bodies manage tax administration or development planning rather than monetary policy formulation. This six-member body comprises representatives from the central bank and external economists.