Agreement on Monetary Policy Framework (Urjit Patel Committee on Inflation)

The ‘Expert Committee to Revise and Strengthen the Monetary Policy Framework’, headed by then RBI Deputy Governor Urjit R. Patel was constituted in 2015.

The main objective of the committee was to recommend revisions and strengthening the monetary policy framework with a view to making it transparent and predictable.

Some Major Recommendations

• RBI should adopt the new Consumer Price Index (CPI) for anchoring the monetary policy.
• Set the inflation target at 4% with a band of +/- 2% around it.
• Monetary policy decision making should be vested in a Monetary Policy Committee (MPC) that should be headed by the Governor.
• Eliminate administered ....