Q. Which of the following statements is/are correct about “Flexible Inflation Targeting Framework” in India?
1. It was based on the recommendation of Raghuram Rajan committee.
2. It was given statutory basis by amending the Banking Regulation Act, 1949.
Select the correct answer using the codes given below:

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: D
Notes:
  • In his first speech as RBI Governor, Raghuram Rajan (Reserve Bank of India, 2013) emphasized on the importance of inflation targeting and set up an Expert Committee under Deputy Governor Urjit Patel to assess the current monetary policy and give recommendations to strengthen it.
  • The RBI Act was amended on May 14, 2016 to give the key provisions in the Monetary Policy Framework Agreement (MPFA) a statutory basis

Source: Source