Amendment of section 58
220. In section 58 of the principal Act, in sub-section (2), after clause (q), the following clauses shall be inserted, namely:––
“(qa) the remuneration and other allowances payable to Members of the Monetary Policy Committee under sub-section (2) of section 45ZD;
(qb) the functions of the Secretary under sub-section (2) of section 45ZG;
(qc) the procedure, manner of conducting of meetings and related matters of the Monetary Policy Committee under sub-section (12) of section 45ZI;
(qd) the particulars and the frequency of publication of document under sub-section (2) of section 45ZJ;
(qe) the form and contents of the Monetary Policy Report to be published under sub-section (2) of section 45ZM;”.
Notes on Clauses:
Clauses 216 to 220 of the Bill seeks to amend certain provisions of the Reserve Bank of India Act, 1934. It is proposed to amend section 2 of the Act so as to insert therein certain definitions to the expressions “Consumer Price Index”, “inflation”, “Monetary Policy Committee”. It is further proposed to insert a new Chapter IIIF in the Act consisting of sections 45Z to 45-O relating to monetary policy to meet the challenge of an increasingly complex economy and to maintain price stability.
The proposed new Chapter inter alia provides that,––
(i) the Central Government shall, in consultation with the Bank (Reserve Bank of India), determine the inflation target in terms of the Consumer Price Index, once in every five years;
(ii) the Central Government may constitute a Committee to be called the Monetary Policy Committee of the Bank which shall consist of the Governor of the Reserve Bank of India as a Chairperson, Deputy Governor of the Bank, one officer of the Bank to be nominated by the Central Board and three persons be appointed by the Central Government as Members to the Committee;
(iii) section 45ZC to 45ZG deals with the terms and conditions of Members of the Monetary Policy Committee;
(iv) the Bank shall provide all information to the Members of the Monetary Policy Committee that may be relevant to achieve the inflation target;
(v) the Bank shall publish a document explaining the steps to be taken by it to implement the decisions of the Monetary Policy Committee, including any changes thereto;
(vi) the Bank shall, once in every six months, publish a document to be called the Monetary Policy Report, explaining the sources of inflation; and the forecasts of Inflation for the period between six to eighteen months from the date of publication of the document.
It is also proposed to make certain amendments to the said Act which are consequential in nature.
