The Flexible Inflation Targeting Framework (FITF) was introduced in India post the amendment of the Reserve Bank of India (RBI) Act, 1934 in __________.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is Option 3 i.e. 2016.
The Flexible Inflation Targeting Framework (FITF) was introduced in India after the amendment of the Reserve Bank of India (RBI) Act, 1934 in May 2016.
This framework marked a significant shift in India's monetary policy approach, with the primary focus on controlling inflation to ensure price stability, while allowing for flexibility in achieving this goal. Under the FITF, the RBI was given the responsibility to maintain inflation within a target range.
The introduction of the FITF followed extensive discussions about the need for a formal inflation-targeting framework to improve India's monetary policy credibility and stability. The amendment of the RBI Act in 2016 led to the establishment of the Monetary Policy Committee (MPC), which was tasked with setting the inflation target and deciding on the monetary policy actions required to meet it.