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Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
5. What is monetary policy? Evaluate the performance of the monetary policy committee in achieving its stated mandate by the 2016 amendment to the Reserve Bank of India Act, 1934. (250 words)
Difficulty level: Tough
Reference: Insights on India
Why the question:
The question is part of the static syllabus of General studies paper – 3 and mentioned as part of Mission-2022 Secure timetable.
Key Demand of the question:
To write about the role of RBI especially as the ‘lender of the last resort’.
Directive word:
Elaborate – Give a detailed account as to how and why it occurred, or what is the context. You must be defining key terms wherever appropriate and substantiate with relevant associated facts.
Structure of the answer:
Introduction:
Begin by defining the monetary policy.
Body:
First, in brief, write in brief about the various components of monetary policy.
Next, write about the monetary policy committee (MPC), its aims and objectives. By citing statistics, write the success and limitations of MPC in controlling inflation and in creating conducive atmosphere for growth.
Conclusion:
Conclude by writing a way forward to overcome the above-mentioned limitations.
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