Q.In India, the policy repo rate is decided by:

Since 2016 the repo rate — the key quantitative tool of monetary policy — has been decided by a specific statutory committee within the RBI, not by the government directly or by any individual bank. …

The Monetary Policy Committee, a six-member body (three RBI members including the Governor, and three external members appointed by the Central Government), meets periodically and votes on the policy repo rate under the flexible inflation-targeting framework — this is option (b). Option (a), the Central Government, sets the inflation target and the broad framework by agreement with the RBI but does not itself vote on the repo rate. Option (c), SEBI, regulates the securities market, not …

A common confusion is selecting (a), since students know the Government appoints some MPC members and sets the inflation target — but the actual rate d …