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 RBI and is reconstituted every year. 3. It functions under the chairmanship of the Union Finance Minister. Select the correct answer using the code given below:

Statement 1 is correct: The Monetary Policy Committee (MPC) is entrusted with the responsibility of determining the policy interest rates (like the repo rate) necessary to achieve the inflation target set by the government. This is its core function.

Statement 2 is incorrect: The MPC is a six-member body. It comprises three members from the Reserve Bank of India (including the Governor, who is the ex-officio Chairperson; the Deputy Governor in charge of monetary policy; and one officer of the Bank nominated by the Central Board) and three members appointed by the Central Government. It is not a 12-member body, and the government-appointed members hold office for four years and are not eligible for re-appointment, so it is not reconstituted every year in its entirety.

Statement 3 is incorrect: The MPC functions under the chairmanship of the Governor of the Reserve Bank of India, not the Union Finance Minister. The Union Finance Minister is part of the broader government framework but does not chair the MPC.

Therefore, only statement 1 is correct.