The committee is answerable to the government of India if the inflation exceeds the range prescribed for three consecutive quarters.
[3] Key decisions pertaining to benchmark interest rates used to be taken by the governor of the Reserve Bank of India alone prior to the establishment of the committee.
This led to uncertainty and resulted in friction between the government and the RBI, especially during the times of low growth and high inflation.
Subsequent negotiations led to the current composition of the committee, with the external members having a four-year term.
After discussions, the finance ministry and RBI agreed on a six-member MPC that addressed earlier concerns of excessive government influence over monetary policy in the country.
Views of key stakeholders in the economy, and analytical work of the Reserve Bank contribute to the process for arriving at the decision on the policy repo rate.