The RBI’s responsibility to regulate the financial sector may have taken a backseat after the adoption of inflation targeting as the main objective. Critically analyse the statement. (15 Marks)

Mentor’s comment:

  • https://www.thehindu.com/opinion/lead/the-perils-of-rbis-fixation-on-inflation/article30578704.ece
  • In the intro, describe the mandates of RBI.
  • In the main body describe how RBI is tasked with various mandates and managing these various mandates like inflation targeting and financial stability and regulations may not always yield the desired results. Also mention the recent inflation data which crossed 7%. Also mention the various banks and NBFC collapse as the example of policies formulated by the RBI not delivering the desired results.
  • In conclusion, stress the moderate success of RBI in maintaining the overall stability of the economy.

 

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