How many members does the MPC have?
Correct answer: (D) 6.
The Monetary Policy Committee has six members: three from the Reserve Bank of India and three external members appointed by the Central Government.
Explanation
The MPC is a six-member body under the RBI's monetary policy framework. Its RBI side has three members: the Governor of the RBI as chairperson, the Deputy Governor in charge of monetary policy, and one RBI officer nominated by the Central Board. The other three are external members appointed by the Central Government. This composition matters because the MPC determines the policy rate needed to achieve the inflation target, and its decision is binding on the RBI. The RBI source also notes the institutional logic: a committee-based approach is meant to add value and transparency to monetary policy decisions. So the answer is not just a count; it reflects the designed balance between RBI insiders and government-appointed external members.
Why the other options are wrong
- (A) Five is short by one member because the MPC has three RBI members and three external members, making six in all.
- (B) Seven adds an extra seat that is not provided in the RBI-described composition of the MPC.
- (C) Four ignores two seats, since the MPC includes three RBI members plus three members appointed by the Central Government.
Concept
This tests the institutional design of India's monetary policy framework, especially how the RBI and the Central Government share representation in the MPC. It recurs in RAS because MPC composition links directly to inflation targeting, the policy rate, and RBI governance.