While maintaining price stability is paramount, the RBI also focuses on supporting economic growth. It does this by ensuring that its monetary policy fosters a conducive environment for investment and sustainable economic expansion. Examine.
Kartavya Desk Staff
Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
5. While maintaining price stability is paramount, the RBI also focuses on supporting economic growth. It does this by ensuring that its monetary policy fosters a conducive environment for investment and sustainable economic expansion. Examine. (250 words)
Difficulty level: Moderate
Reference: Indian Express , Insights on India
Why the question: The article discusses that an independent monetary policy means that domestic interest rates are not influenced by international rates, they are determined independently. Key Demand of the question: To write about the role of RBI especially as part of monetary policy and impediments it faces in achieving it. Directive word: Examine – When asked to ‘Examine’, we must investigate the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications. Structure of the answer: Introduction: Begin by defining the monetary policy. Body: First, in brief, write in brief about the various objectives of monetary policy. Next, write about the impediments it faces by RBI in achieving monetary policy objectives – Price Stability, high inflation, particularly in food and fuel prices, delicate balance between stimulating growth and controlling inflation etc. Substantiate by citing statistics. Conclusion: Conclude by writing a way forward to overcome the above-mentioned limitations.
Why the question:
The article discusses that an independent monetary policy means that domestic interest rates are not influenced by international rates, they are determined independently.
Key Demand of the question:
To write about the role of RBI especially as part of monetary policy and impediments it faces in achieving it.
Directive word:
Examine – When asked to ‘Examine’, we must investigate the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications.
Structure of the answer:
Introduction:
Begin by defining the monetary policy.
First, in brief, write in brief about the various objectives of monetary policy.
Next, write about the impediments it faces by RBI in achieving monetary policy objectives – Price Stability, high inflation, particularly in food and fuel prices, delicate balance between stimulating growth and controlling inflation etc. Substantiate by citing statistics.
Conclusion:
Conclude by writing a way forward to overcome the above-mentioned limitations.