Recommendations made by various committees and economists to improve monetary policy framework in India

As per the suggestions made by Chakravarty Committee, aspects such as price stability, economic growth, equity, social justice, and encouraging the growth of new financial enterprises are some crucial roles connected to the monetary policy of India.
As per Urjit Patel’s report inflation should be the nominal anchor for the Monetary Policy framework, which should be set at 4 % with + /- 2 %. It seems logical, because what hamper poor people is food and fuel, which is necessity of life and which amounts to more than 50 % of consumer price index.
In the conduct of monetary policy in an open economy setting, foreign exchange reserves and associated liquidity management are key, there is a need to enhance the RBI’s sterilization capacity to deal with surges in capital flows.
The primary focus of FIT on price stability augurs well for further liberalization of the capital account and eventual internationalization of the Indian rupees.