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RBI astoundingly adjourned the MPC meeting. Why?

By Priti Kumari

In an unprecedented move, RBI respited its bi-monthly monetary policy meeting, the government fails to declare the three external members.

The pioneering step of RBI to put off its 3-day MPC meeting scheduled from September 29 to October 1, presumably due to absence of the three government nominees to the 6 member MPC panel. The three external members of the Committee - Chetna Ghate, Pami Dua and Ravindra Dholakia had already been superannuated in early September. Nevertheless, the Central Bank had recommended the government to extend their incumbency tenure, amid global pandemic but Modi led centre refuted.

In the last bi-monthly MPC gathering held in August, these former external members were accompanied by the three internal members -RBI governor Shaktikanta Das, Deputy governor Michael Patra and RBI's ED M. K Saggar. In its last meeting, the banker's bank unanimously kept the policy rates unmodified. Antecedent to demonetisation, the Central bank held its first MPC meeting on October 4, 2016, under then RBI governor Urjit Patel.

The statutory six-member MPC panel is the repercussion of the amendment in the RBI Act, 1934 through the Finance Act, 2016. Since its inception in 2016, MPC took the onus for determining the benchmark of various policy rates like repo rate, reverse repo rate etc. It set its sights on bringing more transparency and accountability in fixing India's monetary policy.

Amid the path-breaking economic uncertainties and tittle-tattle that the Union government has flattened the wrong curve, New Delhi should fasten the recruitment of the three external MPC members. Keeping fingers crossed, MPC anon held it's remitted meeting shielding India's drowning economy.

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