Prof Ravindra Dholakia, an economist & faculty member of Economics at the Indian Institute of Management, Ahmedabad, since 1985 has been appointed to the Monetary Policy Committee (MPC), which will help assist RBI decide the interest rates for the Indian Economy. The Centre on Thursday named Dr Dholakia along with the two other academicians Dr Pami Dua, and Mr Chetan Ghate, trained in economics as the external appointees.
The RBI is represented on the MPC by Governor Urjit Patel, Deputy Governor in-charge of monetary policy R. Gandhi, and M.D. Patra, the executive director who was nominated by the RBI board. The RBI will set interest rates according to the majority view of the six-member MPC, with the Governor having the casting vote in case of a tie.
The three external members will have a fixed four years’ term, which is non-renewable.
The MPC will be responsible for ensuring inflation based on the Consumer Price Index is contained within a range of 2 per cent to 6 per cent, a target announced as part of the new monetary policy framework agreed to by the Centre and the RBI.
Previously, decisions were taken by the RBI Governor. The move to inflation targeting and committee based rate-setting were part of changes recommended by former Governor Dr Raghuram Rajan an Indian Institute of Management Ahmedabad Alumnus and then Deputy Governor Dr. Patel.
Dr. Dholakia, whose Ph.D. thesis was on regional disparities in economic growth in India, has served as an independent director on the boards of several corporations including Gujarat State Financial Services, Adani Enterprises, Union Bank of India, Air India, and Gujarat State Petroleum Corp.