The Government of India on Monday reconstituted the Reserve Bank of India’s Monetary Policy Committee (MPC) which was earlier postponed as the six-member committee lacked three members. With new appointments to the MPC, it clears the way for the bi-monthly monetary and credit policy meet to be held. The central government has appointed Ashima Goyal, Shashanka Bhide, and Jayanth R Varma to the MPC. The three new appointees will act as external members in the committee that counts the RBI Governor, Deputy Governor, and an officer of the central bank as its other three members. The MPC determines the key policy interest rate required to achieve the inflation target.
Ashima Goyal, the newly appointed MPC member is also a part time member of the Prime Ministers economic advisory council. Goyal, a visiting fellow at the Economic Growth Centre, Yale University, USA, and a Fulbright Senior Research Fellow at Claremont Graduate University, is currently a professor at the Indira Gandhi Institute of Development Research in Mumbai. She will be joined by Shashanka Bhide who is currently a senior advisor at Nation council for applied economic research. Shashanka Bhide’s research work focuses on agriculture, infrastructure, and poverty analysis among others.
The third appointee, Jayanth R Varma is a professor of Finance and Accounting Area at the Indian Institute of Management, Ahmedabad, teaching capital markets, fixed income, alternative investments, risk management and corporate finance. Previously, Varma has served with the capital market regulator SEBI as its full time and part time member for 4 four years. His areas of research include Indian financial markets and finance theory.
The delay in MPC did irk some market participants who claimed that the delay could have been avoided. “The economy is facing a serious challenge and the RBI has been leading from the front with quick responses through rate cuts, injecting liquidity through OMOs, LTROs and a variety of innovative tools to manage and ensure financial stability. In this hour of economic emergency the MPC has to be in place to formulate policy. This delay could have been avoided,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, earlier last month.
So far since March, the RBI MPC has cut rates by 115 basis points to fight the coronavirus pandemic and its economic fallout.