Govt names 3 new external members to MPC, reconstitutes panel

The majority of the economists and bankers who participated in the Moneycontrol poll said the central bank may leave key rates unchanged.

The Union government on October 1 named three new external members to the Monetary Policy Committee (MPC), thereby reconstituting the rate-setting panel ahead of its crucial monetary policy meeting.

The three new external members were Ram Singh, Director, Delhi School of Economics, Saugata Bhattacharya, an economist and Senior Vice President at Axis Bank, and Nagesh Kumar, Director and CEO, Institute for Studies in Industrial Development.

Other members of the panel include RBI governor Shaktikanta Das as the Chairperson, along with Deputy Governor in charge of Monetary Policy, and one officer of the RBI to be nominated by the Central Board, as other two members.

The next MPC meeting is scheduled to start from October 7 and the key decision on interest rate will be known on October 9.

The external members of the MPC are usually renowned economists or finance experts. The external members of the current MPC are – Ashima Goyal, Jayanth R Varma and Shashanka Bhide. Goyal, a well-known economist, is a professor at Indira Gandhi Institute of Development Research. Varma is professor at IIM-A. Bhide is a senior advisor at Delhi’s National Council of Applied Economic Research. All these members were appointed in October 2020, and their tenure ends on October 4.

Since there is no provision for extension under the RBI Act, the Centre had to make new appointments by the end of the tenure.