In India, which one of the following is responsible for maintaining price stability by controlling inflation?
- ADepartment of Consumer Affairs
- BExpenditure Management Commission
- CFinancial Stability and Development Council
- DReserve Bank of IndiaCorrect
Explanation
In India, the primary responsibility for maintaining price stability and controlling inflation rests with the Reserve Bank of India (RBI). The RBI operates under a flexible inflation targeting framework, formally adopted in 2016, where its primary objective is to maintain inflation within a specified target range (currently 4% with a band of +/- 2%). The Monetary Policy Committee (MPC) of the RBI is tasked with determining the policy interest rates required to achieve this target.
A) Department of Consumer Affairs: This department is concerned with consumer protection and price monitoring, but not with monetary policy for inflation control. B) Expenditure Management Commission: This body advises the government on expenditure rationalization, not directly on monetary policy or inflation control. C) Financial Stability and Development Council: This council focuses on financial sector stability and development, but the direct mandate for price stability lies with the RBI. Therefore, the Reserve Bank of India is responsible for maintaining price stability by controlling inflation.
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