Now interest rates, will no more be decided by the RBI Governor, as the sole authority. The Government has appointed three members to the Monetary Policy Committee (MPC). The first review meeting is scheduled for October 4 2016.
Following are the three academicians occupying the post:
- Mr. Chetan Ghate, Associate Professor at the Indian Statistical Institute.
- Mr. Pami Dua, Director, Delhi School of Economics and
- Mr. Ravindra H. Dholakia, a Professor of Economics at the Indian Institute of Management, Ahmedabad.
The above three along with other three RBI members, will form the total of Six members, with the Governor Urjit Patel who will have a casting vote. There are other two members, who are R. Gandhi, Deputy Governor in charge of Monetary Policy and Executive Director Michael Patra.
The Government nominee will have a four year term or until further orders, whichever is earlier, and it is confirmed that though the appointment is made by the Government, the three will have powers to act as independent members and will be free to take their decisions. This structure is believed to bring down the gap brought out between the Government and the Finance Ministry, and pave way for an effective way to control the growing inflation. It is expected that with this change, the Monetary Policy Committee will take a broad view on various important issues and policies.