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6) The easy drift in inflation is anticipated to continue, raising hopes of a promising policy shift by the RBI. Suggest what according to you should be the role of RBI in such a  scenario?(250 words)

Topic :  Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

6) The easy drift in inflation is anticipated to continue, raising hopes of a promising policy shift by the RBI. Suggest what according to you should be the role of RBI in such a  scenario?(250 words)

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Why this question:

Following its hasty shift in monetary policy stance, RBI is in a tight spot currently. It is now looking for a respectable way out, thus the question in this context expects us to evaluate the role of RBI in such a scenario.

Key demand of the question:

Provide for detailed analysis of the current fix RBI is in, discuss in detail the situation of rising inflation vis-à-vis role of RBI and suggest what needs to be done.

Structure of the answer:

Introduction:

Brief upon the recent trends in the RBI policy , highlight the shifts..

Body:

Discuss the following aspects :

  • Explain in short the causes and consequences of inflation recently in the country.
  • Discuss the policies adopted by the RBI off late – the unusual move of change in its monetary stance from accommodative to neutral.
  • Take hints from the article and suggest what should be the ideal role of RBI in such a scenario.

Conclusion:

Conclude with optimism and suggest how the issue is not beyond  RBI’s control and can be resolved with suitable steps in the right direction.

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