{"id":1683,"date":"2024-03-28T18:03:18","date_gmt":"2024-03-28T12:33:18","guid":{"rendered":"https:\/\/lotusarise.com\/qna\/?p=1683"},"modified":"2024-04-03T07:19:23","modified_gmt":"2024-04-03T01:49:23","slug":"q-in-india-which-one-of-the-following-is-responsible-for-maintaining-price-stability-by-controlling-inflation","status":"publish","type":"post","link":"https:\/\/lotusarise.com\/qna\/upsc\/q-in-india-which-one-of-the-following-is-responsible-for-maintaining-price-stability-by-controlling-inflation","title":{"rendered":"Q. In India, which one of the following is responsible for maintaining price stability by controlling inflation?"},"content":{"rendered":"\n<ul class=\"mcq wp-block-list\">\n<li>Department of Consumer Affairs<\/li>\n\n\n\n<li>Expenditure Management Commission<\/li>\n\n\n\n<li>Financial Stability and Development Council<\/li>\n\n\n\n<li>Reserve Bank of India<\/li>\n<\/ul>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Answer: (d) Reserve Bank of India<\/strong><\/p>\n<\/blockquote>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"reserve-bank-of-india\"><strong>Reserve Bank of India<\/strong><\/h5>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Reserve Bank of India<\/strong>&nbsp;is India\u2019s central bank has key function to keep&nbsp;<strong>check on the inflation<\/strong>&nbsp;by use of&nbsp;<strong>monetary policy<\/strong>&nbsp;in forms of qualitative and quantitative measures. This responsibility is explicitly mandated under the&nbsp;<strong>Reserve Bank of India Act, 1934<\/strong>.<\/li>\n\n\n\n<li>The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth. Price stability is a necessary precondition to sustainable growth.<\/li>\n\n\n\n<li>In May 2016, the Reserve Bank of India (RBI) Act, 1934 was amended to provide a&nbsp;<strong>statutory basis for the implementation of the flexible inflation targeting framework<\/strong>. The amended RBI Act also provides for the<strong>&nbsp;inflation target<\/strong>&nbsp;to be set by the Government of India, in consultation with the Reserve Bank, once&nbsp;<strong>in every five years.<\/strong><\/li>\n\n\n\n<li><strong>Functions of RBI<\/strong>:\n<ul class=\"wp-block-list\">\n<li><strong>Monetary authority:<\/strong>&nbsp;The Reserve Bank of India (RBI) is the central bank of India and is responsible for implementing and monitoring monetary policy to ensure price stability and support economic growth.<\/li>\n\n\n\n<li><strong>Foreign exchange management:&nbsp;<\/strong>The RBI manages India\u2019s foreign exchange reserves and oversees the foreign trade payment system. It also maintains the value of the rupee outside India.<\/li>\n\n\n\n<li><strong>Regulator and administrator of the financial system:<\/strong>&nbsp;The RBI regulates and supervises the banking and financial system in India. It sets the rules for branch expansion, bank mergers, liquidity of assets, and the issuance of licences.<\/li>\n\n\n\n<li><strong>Issuer of currency:<\/strong>&nbsp;The RBI issues and manages India\u2019s currency notes and coins. It is also responsible for exchanging coins and currency.<\/li>\n\n\n\n<li><strong>Banker to banks:<\/strong>&nbsp;The RBI settles interbank transactions and acts as the banker\u2019s bank.<\/li>\n\n\n\n<li><strong>Developmental role:&nbsp;<\/strong>The RBI supports and promotes India\u2019s economic development.<\/li>\n\n\n\n<li><strong>Banker and debt manager to the government:&nbsp;<\/strong>The RBI conducts banking transactions for the Indian government and manages its cash holdings. It also manages the government\u2019s public debt and issues new loans.<\/li>\n\n\n\n<li><strong>Overseer of market operations:&nbsp;<\/strong>The RBI regulates and develops the repo market, money market, and other market instruments. It also conducts money market operations, foreign exchange operations, and government securities operations.<\/li>\n\n\n\n<li><strong>Lender of last resort:&nbsp;<\/strong>The RBI provides loans to banks in times of financial crisis.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h6 class=\"wp-block-heading\" id=\"financial-stability-and-development-council-fsdc\">Financial Stability and Development Council (FSDC)<\/h6>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Establishment of FSDC:<\/strong>\n<ul class=\"wp-block-list\">\n<li>The Financial Stability and Development Council (FSDC) is an<strong>&nbsp;autonomous body<\/strong>&nbsp;constituted by the Government of India.<\/li>\n\n\n\n<li>It is a<strong>&nbsp;non-statutory apex council<\/strong>\u00a0under the Ministry of Finance constituted by the\u00a0<strong>Executive Order in 2010.<\/strong>\n<ul class=\"wp-block-list\">\n<li>The Raghuram Rajan committee (2008) on&nbsp;<strong>financial sector reforms first proposed the creation of FSDC.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Composition:<\/strong>\n<ul class=\"wp-block-list\">\n<li>It is chaired by the<strong>&nbsp;Finance Minister and its members include the heads of all Financial Sector Regulators (RBI,&nbsp;SEBI,&nbsp;PFRDA&nbsp;&amp;&nbsp;IRDA),<\/strong>\u00a0Finance Secretary, Secretary of Department of Economic Affairs (DEA), Secretary of Department of Financial Services (DFS), and Chief Economic Adviser.\n<ul class=\"wp-block-list\">\n<li>In 2018, the government&nbsp;<strong>reconstituted FSDC to include the Minister of State<\/strong>&nbsp;responsible for the Department of Economic Affairs (DEA), Secretary of Department of Electronics and Information Technology, Chairperson of the&nbsp;<strong>Insolvency and Bankruptcy Board of India (IBBI)<\/strong>&nbsp;and the Revenue Secretary.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>FSDC sub-committee is headed by the&nbsp;<strong>Governor of RBI.<\/strong><\/li>\n\n\n\n<li>The Council can invite&nbsp;<strong>experts&nbsp;<\/strong>to its meeting if required.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Functions:<\/strong>\n<ul class=\"wp-block-list\">\n<li>To strengthen and institutionalize the mechanism for maintaining&nbsp;<strong>financial stability, enhancing inter-regulatory coordination and promoting financial sector development.<\/strong><\/li>\n\n\n\n<li><strong>To monitor macro-prudential supervision<\/strong>&nbsp;of the economy. It assesses the functioning of large financial conglomerates.<\/li>\n\n\n\n<li><strong>Coordinating India\u2019s international interface<\/strong>&nbsp;with financial sector bodies like the Financial Action Task Force (FATF), Financial Stability Board (FSB) and any such body as may be decided by the Finance Minister from time to time.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h6 class=\"wp-block-heading\" id=\"expenditure-management-commission\">Expenditure Management Commission<\/h6>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The constitution of Expenditure Management Commission (EMC) of India was announced in the Budget Speech by Finance Minister of India Arun Jaitley in the budget of&nbsp;<strong>2014\u201315<\/strong>.<\/li>\n\n\n\n<li>The Commission was a recommendation body with the&nbsp;<strong>primary responsibility of suggesting major expenditure reforms<\/strong>&nbsp;that will enable the government&nbsp;<strong>to reduce and manage its fiscal deficit<\/strong>&nbsp;at a more sustainable levels.<\/li>\n\n\n\n<li>The commission was mandated&nbsp;<strong>to evaluate proposals for reducing the three major subsidies (i.e. food, fertilizer and oil).<\/strong><\/li>\n<\/ul>\n\n\n\n<h6 class=\"wp-block-heading\" id=\"department-of-consumer-affairs\">Department of Consumer Affairs<\/h6>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Department of Consumer Affairs is one of the two Departments under the&nbsp;<strong>Ministry of Consumer Affairs, Food &amp; Public Distribution<\/strong>.<\/li>\n\n\n\n<li>It was&nbsp;<strong>constituted as a separate Department in June 1997<\/strong>&nbsp;as it was considered necessary to have a separate Department to give a fillip to the nascent consumer movement in the country.<\/li>\n\n\n\n<li><strong>The Department has been entrusted with the following work:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Implementation of&nbsp;<strong>Consumer Protection<\/strong>&nbsp;Act, 2019.<\/li>\n\n\n\n<li>Implementation of&nbsp;<strong>Bureau of Indian Standards<\/strong>&nbsp;Act, 2016<\/li>\n\n\n\n<li>Implementation of&nbsp;<strong>Standards of Weights and Measures<\/strong>&nbsp;\u2013 The Legal Metrology Act, 2009.<\/li>\n\n\n\n<li>Regulation of&nbsp;<strong>Packaged Commodities.<\/strong><\/li>\n\n\n\n<li>The&nbsp;<strong>Essential Commodities Act<\/strong>, 1955 (10 of 1955) (Supply, Prices and Distribution of Essential Commodities not dealt with specifically by any other Department).<\/li>\n\n\n\n<li>Prevention of&nbsp;<strong>Black Marketing<\/strong>&nbsp;and Maintenance of Supply of Essential Commodities Act, 1980(7 of 1980).<\/li>\n\n\n\n<li>Monitoring of prices and availability of essential commodities.<\/li>\n\n\n\n<li><strong>Direct Selling<\/strong><\/li>\n\n\n\n<li>Training in&nbsp;<strong>Legal Metrology<\/strong>.<\/li>\n\n\n\n<li>The Emblems and Names (Prevention of Improper Use) Act, 1952.<\/li>\n\n\n\n<li>Laying down specifications, standards and codes and ensuring quality control of bio-fuels for end uses.<\/li>\n\n\n\n<li>Consumer Cooperatives<\/li>\n\n\n\n<li>National Test House.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Answer: (d) Reserve Bank of India Reserve Bank of India Financial Stability and Development Council (FSDC) Expenditure Management Commission Department of Consumer Affairs<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[1,3],"tags":[38],"years":[51],"class_list":["post-1683","post","type-post","status-publish","format-standard","hentry","category-upsc","category-prelims","tag-indian-economy","years-51"],"acf":[],"taxonomy_info":{"category":[{"value":1,"label":"UPSC"},{"value":3,"label":"Prelims"}],"post_tag":[{"value":38,"label":"Indian Economy"}],"years":[{"value":51,"label":"2022"}]},"featured_image_src_large":false,"author_info":{"display_name":"LotusArise","author_link":"https:\/\/lotusarise.com\/qna\/author\/team-lotusarise"},"comment_info":0,"category_info":[{"term_id":1,"name":"UPSC","slug":"upsc","term_group":0,"term_taxonomy_id":1,"taxonomy":"category","description":"","parent":0,"count":1269,"filter":"raw","cat_ID":1,"category_count":1269,"category_description":"","cat_name":"UPSC","category_nicename":"upsc","category_parent":0},{"term_id":3,"name":"Prelims","slug":"prelims","term_group":0,"term_taxonomy_id":3,"taxonomy":"category","description":"","parent":1,"count":1251,"filter":"raw","cat_ID":3,"category_count":1251,"category_description":"","cat_name":"Prelims","category_nicename":"prelims","category_parent":1}],"tag_info":[{"term_id":38,"name":"Indian Economy","slug":"indian-economy","term_group":0,"term_taxonomy_id":38,"taxonomy":"post_tag","description":"","parent":0,"count":225,"filter":"raw"}],"_links":{"self":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1683","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/comments?post=1683"}],"version-history":[{"count":0,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1683\/revisions"}],"wp:attachment":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/media?parent=1683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/categories?post=1683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/tags?post=1683"},{"taxonomy":"years","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/years?post=1683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}