Appointments Committee of the Cabinet has approved the names of three outside experts as members of the Monetary Policy Committee that will include Reserve Bank of India (RBI) officials and decide on the policy rates of the central bank.
The experts are Chetan Ghate, professor at Indian Statistical Institute; Pami Dua, director at Delhi School of Economics; and Ravindra Dholakia, professor at Indian Institute of Management, Ahmedabad.
The other members of the committee will include RBI governor Urjit Patel, deputy governor R. Gandhi, who is in charge of the monetary policy, and executive director Michael Patra.
The MPC is expected to sit for its first monetary policy review on 4 October. The RBI governor will only have a casting vote in case of a tie in the six-member committee.
The Monetary Policy Committee will strive to ensure that the inflation target decided by the government and the central bank is met. The RBI has the mandate to contain retail inflation within a band of 4%, plus or minus 2 percentage points.
The idea of a Monetary Policy Committee was proposed by an RBI-appointed committee led by Patel, then a deputy governor of RBI, in February 2014. That panel had recommended a five-member committee on which three members would be from the RBI and two external members would be appointed by the RBI governor and the deputy governor.
Last year, the government and the RBI agreed to formalize the inflation-targeting framework and set in motion the constitution of the six-member committee.