UPSC Prelims 2022 · Question 68 of 98
UPSC Prelims 2022 question on Inflation Control Responsibility
- ExamUPSC CSE
- Year2022
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicBanking
- DifficultyEasy
- TypeDirect
In India, which one of the following is responsible for maintaining price stability by controlling inflation?
Show answer
Answer: D. Reserve Bank of India
The Reserve Bank of India (RBI) is vested with the responsibility of conducting monetary policy. This responsibility is explicitly mandated under the Reserve Bank of India Act, 1934. The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth.
The MPC (Monetary Policy Committee) determines the policy interest rate required to achieve the inflation target. RBI uses instruments such as Repo rate, Reverse repo, Open market operations, and Liquidity adjustment facility to implement monetary policy.
Hence option (d) Reserve Bank of India is the correct answer.