In India, which one of the following is responsible for maintaining pr

In India, which one of the following is responsible for maintaining price stability by controlling inflation ?

Department of Consumer Affairs

Expenditure Management Commission

Financial Stability and Development Council

Reserve Bank of India

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This question was previously asked in

UPSC IAS – 2022

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In India, the primary responsibility for maintaining price stability by controlling inflation lies with the Reserve Bank of India (RBI).

– The Reserve Bank of India (RBI) is the central bank of India and is mandated by the government to maintain price stability while keeping in mind the objective of growth.
– The Monetary Policy Committee (MPC) of the RBI is specifically tasked with setting the policy repo rate to achieve the inflation target (currently 4% with a band of +/- 2%).
– Other bodies like the Department of Consumer Affairs might monitor prices of essential commodities, the Expenditure Management Commission deals with government spending, and the Financial Stability and Development Council coordinates financial regulation, but none have the primary mandate and tools for controlling macroeconomic inflation like the RBI does through monetary policy.

The current framework for monetary policy in India is based on a flexible inflation targeting regime adopted in 2016. The RBI uses tools like repo rates, reserve ratios, and open market operations to manage liquidity and influence inflation.

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