Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
4. Even though the objectives of monetary policy are clear, achieving them can be a complex and multifaceted task, especially in a diverse and dynamic economy like India’s. Examine. (250 words)
Difficulty level: Moderate
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-2024 Secure timetable (revision).
Key Demand of the question:
To write about the role of RBI especially as part of monetary policy and impediments it faces in achieving it.
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 defining the monetary policy.
Body:
First, in brief, write in brief about the various objectives of monetary policy.
Next, write about the impediments it faces by RBI in achieving monetary policy objectives – Price Stability, high inflation, particularly in food and fuel prices, delicate balance between stimulating growth and controlling inflation etc. Substantiate by citing statistics.
Conclusion:
Conclude by writing a way forward to overcome the above-mentioned limitations.
