Topic : Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
6) The easy drift in inflation is anticipated to continue, raising hopes of a promising policy shift by the RBI. Suggest what according to you should be the role of RBI in such a scenario?(250 words)
Why this question:
Following its hasty shift in monetary policy stance, RBI is in a tight spot currently. It is now looking for a respectable way out, thus the question in this context expects us to evaluate the role of RBI in such a scenario.
Key demand of the question:
Provide for detailed analysis of the current fix RBI is in, discuss in detail the situation of rising inflation vis-à-vis role of RBI and suggest what needs to be done.
Structure of the answer:
Introduction:
Brief upon the recent trends in the RBI policy , highlight the shifts..
Body:
Discuss the following aspects :
- Explain in short the causes and consequences of inflation recently in the country.
- Discuss the policies adopted by the RBI off late – the unusual move of change in its monetary stance from accommodative to neutral.
- Take hints from the article and suggest what should be the ideal role of RBI in such a scenario.
Conclusion:
Conclude with optimism and suggest how the issue is not beyond RBI’s control and can be resolved with suitable steps in the right direction.
