Discovering the role of the monetary policy committee constituted by the
reserve bank of India in 2016 in addressing the macroeconomic indicators in
the economy. How effective have these instruments been in achieving
meaningful macroeconomic indicators?

Vaidehi Bhushan

doi:10.46609/IJSSER.2026.v11i07.025

Title: Discovering the role of the monetary policy committee constituted by the reserve bank of India in 2016 in addressing the macroeconomic indicators in the economy. How effective have these instruments been in achieving meaningful macroeconomic indicators?
Authors: Vaidehi Bhushan
Journal: International Journal of Social Science and Economic Research (IJSSER) ISSN: 2455-8834 Volume: 11 Issue: 7 Publication Date: July 2026 DOI: 10.46609/IJSSER.2026.v11i07.025
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Vaidehi Bhushan DPS International
MLA 8 Bhushan, Vaidehi. "Discovering the role of the monetary policy committee constituted by the reserve bank of India in 2016 in addressing the macroeconomic indicators in the economy. How effective have these instruments been in achieving meaningful macroeconomic indicators?" Int. j. of Social Science and Economic Research, vol. 11, no. 7, July 2026, pp. 3257-3268, doi.org/10.46609/IJSSER.2026.v11i07.025. Accessed July 2026. APA 6 Bhushan, V. (2026, July). Discovering the role of the monetary policy committee constituted by the reserve bank of India in 2016 in addressing the macroeconomic indicators in the economy. How effective have these instruments been in achieving meaningful macroeconomic indicators? Int. j. of Social Science and Economic Research, 11(7), 3257-3268. Retrieved from https://doi.org/10.46609/IJSSER.2026.v11i07.025 Chicago Bhushan, Vaidehi. "Discovering the role of the monetary policy committee constituted by the reserve bank of India in 2016 in addressing the macroeconomic indicators in the economy. How effective have these instruments been in achieving meaningful macroeconomic indicators?" Int. j. of Social Science and Economic Research 11, no. 7 (July 2026), 3257-3268. Accessed July, 2026. https://doi.org/10.46609/IJSSER.2026.v11i07.025.
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ABSTRACT: Monetary policy plays a crucial role in maintaining macroeconomic stability by regulating inflation, influencing interest rates, and supporting sustainable economic growth. The establishment of the Monetary Policy Committee (MPC) by the Reserve Bank of India (RBI) in 2016 marked a significant shift in India's monetary policy framework through the adoption of Flexible Inflation Targeting (FIT). This study examines the role of the MPC in addressing key macroeconomic indicators such as inflation, GDP growth, and employment, while evaluating the effectiveness of the monetary policy instruments adopted since 2016 in achieving meaningful macroeconomic outcomes. A comparative analysis of the pre-2016 and post-2016 monetary policy frameworks was undertaken to assess the impact of inflation targeting on macroeconomic performance. Particular emphasis was placed on evaluating the effectiveness of monetary policy instruments such as the repo rate, reverse repo rate, and open market operations in influencing inflation, liquidity, borrowing, investment, and overall economic activity under geopolitical disturbances. The findings indicate that the establishment of the MPC improved the transparency, accountability, and credibility of monetary policy while contributing to greater inflation stability and strengthening the transmission of policy decisions. The analysis demonstrates that inflation remained within or close to the prescribed target range for most of the post-2016 period despite major external shocks, including the COVID-19 pandemic and the Russia-Ukraine conflict. However, the study also finds that monetary policy alone cannot effectively address supply-side inflation, imported inflation, geopolitical disruptions, or structural rigidities within the financial system. Overall, the research concludes that the monetary policy instruments adopted by the MPC have been largely effective in improving India's macroeconomic stability and have provided a more credible and predictable effect but are under stress in the current disruption of the current economic world order. Nevertheless, their long-term success continues to depend upon complementary fiscal policies, structural reforms, and a stable global economic environment.

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