UPSC Prelims 2022 · GS Paper I

Question 68: Economy and Social Development

In India, which one of the following is responsible for maintaining price stability by controlling inflation ?

aDepartment of Consumer Affairs

bExpenditure Management Commission

cFinancial Stability and Development Council

dReserve Bank of India

AnswerUPSC’s answer is (d).

The Reserve Bank of India is responsible for monetary policy and price stability. Under the amended RBI Act, a Monetary Policy Committee sets the policy rate to meet the inflation target the government notifies, 4 percent with a band of 2 to 6 percent in 2022. The Department of Consumer Affairs, the Expenditure Management Commission and the Financial Stability and Development Council have different roles: consumer matters, government spending and coordination among financial regulators.

Why each option is right or wrong

(a) The Department of Consumer Affairs handles consumer matters, not monetary control.
(b) The Expenditure Management Commission looks at government spending.
(c) The FSDC coordinates financial regulators on stability and development.
(d) Correct. RBI controls inflation through monetary policy.

Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2022, General Studies Paper I, Series A. The paper on upsc.gov.in.