Monetary Policy Committee
In one line: The Monetary Policy Committee (MPC) is a statutory body under Section 45ZB of the RBI Act, 1934 that decides the policy repo rate needed to achieve the inflation target.
Composition
Six members: the RBI Governor (chairperson), the Deputy Governor in charge of monetary policy, one RBI officer nominated by the Central Board, and three external members appointed by the Central Government for four years, who cannot be reappointed. The quorum is four. Each member has one vote and the Governor has a casting vote in a tie.
How it works
The MPC meets at least four times a year, in practice six. Its resolution and the minutes of each meeting are published. The MPC was first constituted in September 2016.
Why it is in the news
The decade review of inflation targeting asks whether the MPC's main tool, the repo rate, can control inflation in India's economy.
Where to go next
- Phillips curve
- Inflation expectations
Monetary Policy Committee in the news
- RBI may raise rates twice by the end of 2026, analysts say 19 September 2026
Who sets the rate
- Ten years of inflation targeting: does the RBI's framework work in India? 7 September 2026
The six-member body that sets the repo rate to meet the inflation target.
On the reference shelf
Previous-year questions on this
- 2024 · GS3 · 10 marks What are the causes of persistent high food inflation in India? Comment on the effectiveness of the monetary policy of the RBI to control this type of inflation.
- 2022 · GS2 · 15 marks Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of the society. Discuss.
- 2019 · GS3 · 10 marks Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your arguments.
- 2022 · Prelims With reference to the Indian economy, consider the following statements: 1. If the inflation is too high, Reserve Bank of India (RBI) is likely to buy government securities. 2. If the rupee is…
- 2022 · Prelims In India, which one of the following is responsible for maintaining price stability by controlling inflation? (a) Department of Consumer Affairs (b) Expenditure Management Commission (c) Financial…
- 2017 · Prelims Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)? 1. It decides the RBI's benchmark interest rates. 2. It is a 12-member body including the Governor of…