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Examine the impact of RBI’s various quantitative instruments of credit control on achieving the objectives of monetary policy.

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

5. Examine the impact of RBI’s various quantitative instruments of credit control on achieving the objectives of monetary policy.  (250 words)

Difficulty level: Tough

Reference: Insights on India

Why the question:

The question is part of the static syllabus of General studies paper – 3 and mentioned as part of Mission-2022 Secure timetable.

Key Demand of the question:

To write about the RBI’s quantitative instruments in achieving the objective of monetary policy.

Directive word:

Examine – When asked to ‘Examine’, we must investigate the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications.

Structure of the answer:

Introduction: 

Begin by writing about the link between RBI’s quantitative instruments and the monetary policy.

Body:

First, in brief, write in brief about the various objectives of monetary policy – Regulation of monetary growth, maintenance of price stability, Ensuring adequate expansion of credit, Assist economic growth, Encourage flow of credit into priority and neglected sectors and Strengthening of the banking system of the country etc.

Next, write about the impact of RBI’s quantitative instruments on achieving the above stated objectives.

Conclusion:

Conclude by summarising.