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      Question

      Under Chapter IIIF of the RBI Act, 1934, who determines

      the inflation target and how frequently under Section 45ZA?
      A The Reserve Bank alone, once every year Correct Answer Incorrect Answer
      B The Monetary Policy Committee, once every two years Correct Answer Incorrect Answer
      C The Central Government in consultation with the Bank, once in every five years Correct Answer Incorrect Answer
      D The Central Board, once every three years Correct Answer Incorrect Answer
      E The Central Government alone, once every five years Correct Answer Incorrect Answer

      Solution

      Section 45ZA(1) provides that the Central Government shall, in consultation with the Bank, determine the inflation target in terms of the Consumer Price Index once in every five years. Upon such determination, the target is notified in the Official Gazette under Section 45ZA(2). This forms the foundation of India's monetary policy framework introduced by Act 28 of 2016. The correct position is the Central Government, in consultation with the Bank, once in every five years.

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