The Reserve Bank of India (RBI) Governor Shaktikanta Das recently expressed confidence that new external members of the Monetary Policy Committee (MPC) will be appointed on time. Speaking at the Fibac event, Das emphasized that the upcoming MPC meeting, scheduled for October 7, can only take place if the new members are appointed promptly. The current terms of the three external members—Ashima Goyal, Jayanth Varma, and Shashank Bhide—are set to expire on October 4. The responsibility for these appointments lies with the government, and Das anticipates that the process will be completed before the next MPC meeting.
The MPC, consisting of six members, plays a crucial role in setting the country’s monetary policy. Three of these members, including the RBI Governor, are from the central bank, while the other three are external experts appointed by the government. The committee’s decisions are based on majority voting, and the Governor holds a casting vote in case of a tie.
In recent MPC meetings, there has been notable dissent, particularly from Goyal and Varma, who have advocated for interest rate cuts to stimulate economic growth. However, the majority has focused on controlling inflation, resulting in nine consecutive meetings where the RBI has maintained the status quo on rates.
Governor Das also highlighted the positive economic fundamentals of India, reinforcing the country’s growth story. This stability ensures that India is well-positioned to tackle inflation and other macroeconomic challenges.
By maintaining financial stability and ensuring timely appointments, the RBI aims to continue supporting India’s economic growth trajectory.
