Center has appointed three academics as members of a new monetary policy committee that will set interest rates. They are Chetan Ghate, a professor at Indian Statistical Institute; Pami Dua, a director at the Delhi School of Economics; and Ravindra Dholakia, a professor at the Indian Institute of Management in Ahmedabad, in Prime Minister Narendra Modi’s home state of Gujarat.
It represents a marked change to monetary policy, which was previously decided solely by the RBI Governor.
The members will have a term of four years, the official order said.
The other three members of the committee will be from the Reserve Bank of India, including RBI Governor Urjit Patel.
Ghate was part of a five-member technical advisory committee that provided non-binding advice on interest rates to the RBI governor ahead of each policy review.
He was also a member of the panel that in 2014 recommended the changes to monetary policy, including targeting inflation and establishing a panel to decide rates.
The committee will be responsible for ensuring consumer inflation stays within a range of 2 to 6 percent, a target that was previously announced by the government.
The next monetary policy review is on October 4 and is likely to be decided by the Monetary Policy Committee.