Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)? 1. It decides the RBIs benchmark interest rates. 2. It is a 12-member body including the Governor of RBI and is reconstituted every year. 3. It functions under

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Q: 11 (IAS/2017)

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 :

question_subject: 

Polity

question_exam: 

IAS

stats: 

0,143,53,143,33,12,8

keywords: 

{'monetary policy committee': [0, 0, 0, 2], 'mpc': [0, 0, 0, 2], 'rbi': [1, 4, 2, 23], 'union finance minister': [0, 0, 1, 0], 'chairmanship': [0, 0, 0, 1], 'benchmark interest rates': [0, 0, 0, 1], 'governor': [5, 1, 0, 6]}

The correct answer is `1 only` because out of the given statements, only the first one is true. The Monetary Policy Committee (MPC) is indeed responsible for deciding the Reserve Bank of India`s benchmark interest rates.

Statements 2 and 3 are incorrect. Statement 2 is incorrect because MPC is a 6, not 12, members committee, including the Governor of RBI, and it`s not reconstituted every year. The members serve for a period of four years and are not eligible for reappointment.

Statement 3 is incorrect as the MPC doesn`t function under the Union Finance Minister. It is actually an independent body, and the Governor of RBI is the ex-officio Chairperson. Hence, any option that includes either of these statements is against the factual specifications of the MPC, making `1 only` the correct answer.