23 September 2016 Current Affairs: The Appointments Committee of Cabinet (ACC) has appointed three economists as the external appointees on the Monetary Policy Committee (MPC). They are Pami Dua, Chetan Ghate and Ravindra Dholakia. They will have a fixed four year term and it is non-renewable.
Pami Dua : She is the Director of the Delhi School of Economics (DSE). She is an expert on econometrics and forecasting, has a Ph.D. from the London School of Economics. Her research work spreads across different fields like business cycle analysis, macroeconomics, econometrics, and forecasting. She is also the Chairperson of the Agricultural Economics Research Centre (AERC) at the University of Delhi.
Chetan Ghate : He is a macroeconomist and a professor at the Indian Statistical Institute (ISI), Delhi. His research focus is on economic growth, economic development, fluctuations and monetary and fiscal policy in developing and emerging market economies. He is the only member of the Technical Advisory Committee (TAC) on Monetary Policy who becomes a member of the MPC.
Ravindra Dholakia : He is a faculty member of Economics at the Indian Institute of Management (IIM), Ahmedabad. He has served as an independent director on the boards of several corporations including Gujarat State Financial Services, Union Bank of India, Air India, and Gujarat State Petroleum Corp.
Monetary Policy Committee (MPC) : MPC under the RBI will decide monetary policy by setting interest rates. It aims to bring significant changes in the power the RBI governor while deciding interest rates. The RBI will set interest rates according to the majority view of the six-member MPC, with the Governor having the casting vote in case of a tie.
MPC replaces previous arrangement where RBI Governor along with a Technical Advisory Committee (TAC) taking decisions on monetary policy including setting interest rates. In the previous arrangement TAC was only having advisory functions and the RBI Governor enjoyed veto power over the committee in setting interest rates. Thus, it is expected to bring “value and transparency” to monetary policy decisions taken by central banks which have far-reaching implications on economy, investors, savers and borrowers.