Monetary Policy Framework
Agreement
1)
Objectives
:
a)
Maintain
price stability with a focus on growth
b)
Subdue
India's chronic price volatility
2)
The Centre and the RBI signed an agreement under which the central
bank will prioritise controlling price rise above the other objectives of the
monetary policy — interest rates and the foreign exchange rate.
3)
The Reserve Bank is committed to bring inflation below 6 per cent
by January 2016.
4)
The consumer inflation target has been set at 4 per cent, with a
band of plus or minus 2 percentage points, for the financial year 2016-17.
5)
The bank will have to explain to the government the causes, and
what steps it intends to take to steer inflation back within a given time if it
misses the target.
6)
In case, factors beyond the control of the Reserve Bank such as
fiscal irresponsibility of the Centre or constraints in supplies of goods and
services are stoking inflation, RBI could hike interest rates to meet the
target set.
7)
The Centre would amend the RBI Act for the setting up of the proposed
monetary policy committee, a key element of the new framework.
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10-fold scaling up of Direct Benefit Transfer
1)
As a key expenditure control measure, the Union Budget 2015-16
proposes a 10-fold scaling up of direct benefit transfers (DBT) during the next
financial year.
2)
The move is expected to lead to :
a)
accurate targeting of beneficiaries
b)
de-duplication, reduction of fraud
c)
elimination of waste and leakage in public programmes and schemes
3)
The total number of beneficiaries under 35 DBT schemes will grow
from one crore to 10 crore.
4)
Cash transfers and benefits of about Rs 33,000 crore will flow
every year to their bank accounts on the DBT platform.
5)
The platform could also be adopted for making payment to bank
accounts of the 39 lakh para-workers, including ASHAs and para-teachers, who
now get monthly stipends in cash.
6)
Seven new scholarship schemes of the Department of Higher
Education, Ministry of Human Resource Development, are being brought on to the
DBT platform.
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