What is the primary objective of the Monetary Policy Committee (MP

The primary goal of the MPC is to maintain inflation within a target range (4% +/- 2%) while supporting economic growth. Through an agreement signed between the RBI and the government as at February 20, 2015, RBI decided to adopt FITF as the modern monetary policy framework. In May 2016, the RBI Act, 1934 was amended to provide a statutory basis for the implementation of the FITF. What FIT means is that price stability is to be achieved by keeping track of, forecasting, and controlling inflation; as such, if the percentage change in monthly Consumer Price Index (headline CPI) year-on-year was outside or expected to be outside a specific range of numbers (the "Target") for a certain duration, it gives RBI a justification to decrease or increase short-term interest rates. Thus, price stability became an overarching objective of monetary policy, moving other factors to the background.The amended RBI Act provides for the inflation target to be set by the Government of India, in consultation with the Reserve Bank, once every five years. The Central Government has notified 4% CPI inflation as the target for the period from August 5, 2016, to March 31, 2021, with the upper and lower tolerance limit of 6% and 2% respectively. The same range has been adopted beyond March 31, 2026 by RBI for next 5 years from April 01, 2026 to March 31, 2031.