CHANAKYA NATIONAL LAW UNIVERSITY

NAYAYA NAGAR, MITHAPUR, PATNA- 800001

ROUGH DRAFT SUBMITTED IN THE PARTIAL FULFILMENT OF THE COURSE TITLED –

ECONOMICS - I

TOPIC: CHALLENGES OF MONETARY POLICY IN INDIA

SUBMITTED TO: Dr. Shivani Mohan

Faculty of Economics

SUBMITTED BY : Prasidhi Agrawal

ROLL NO: 1950

SEMESTER : THIRD

SESSION : 2018- 2023

COURSE : B.A. LLB. ( HONS.)

 INTRODUCTION
Central bankers often defend what they are doing whereas the general public is not sure of
what they are doing or how central bank actions will affect their well-being. Look at what
has been happening in the US in recent weeks and months; many people, including
economists, do not seem to believe what the Federal Reserve says or does. The Indian
situation is different. Many Indian economic/business analysts hold a favourable view of the
functioning of the Reserve Bank of India (RBI), right from the institution of the new policy
framework and the formation of the monetary policy committee (MPC) to the use of
regulatory reach to stabilize financial markets and commercial banks.
Is such optimism justifiable in the present uncertain economic and political situation or
should a few analytical questions for retrospection must be asked such as how well do we
know the effect of the official interest rate on consumption or how well does the RBI know
the process of formation of expectations or one could ask whether the central bank has any
view of the macroprudential aspect of monetary policy? Strong winds of
change are sweeping across the Indian financial landscape and the road ahead is
challenging. Therefore it is important for us to answer these above raised questions and do
the needful.

AIMS AND OBJECTIVES

1. The researcher tends to understand the monetary policy of India.

2. The researcher tends to analyse the present situation with the help of a few analytical questions

3. The researcher tends to identify the challenges of the monetary policy in India and offer
guidelines for changes that needs to be made.

RESEARCH METHODOLOGY
The researcher will be relying upon Doctrinal Method of research to complete the project.

SOURCES OF DATA
The researcher use both, primary as well as the secondary sources to complete the project.
 TENTATIVE CHAPTERIZATION
1. Introduction TO RBI

2. Introduction to RBI’s Monetary Policy

3. History of Monetary Policy

4. Monetary Policy in Different Years.

5. Monetary Policy Instruments in India

6. The effect on Monetary Policy by the Fiscal Policy.

7. How effective is Monetary Policy ( A critical analysis)

CONCLUSION
In India the objectives of monetary policy evolved as maintaining price stability and ensuring
adequate flow of credit to the productive sectors of the economy, with the progressive liberalisation
and increasing globalisation of the economy, maintaining orderly conditions in the financial markets
emerged as additional policy objectives. Thus, monetary policy in India endeavours to maintain a
judicious balance between price stability, economic growth and financial stability. Monetary policy
is very essential for the economic development of the country. If correct monetary measures are
taken at the right time it will help the country to survive even in the difficult situation. If monetary
measures are not taken properly it may destroy the economic position of the country.

BIBLIOGRAPHY



1. https://www.scribd.com/document/210982358/monetary-policy-project

2. https://www.livemint.com/Opinion/lWdLAWnZkBA0TV9Xn9kXUN/Monetary-policy-
challenges-for-RBI.html

3. https://www.scribd.com/doc/22357274/monetary-policy-of-india-and-its-effects