- Budgetary Process:
- RBI acts as banker to the government, managing receipts and payments.
- It maintains government accounts (Consolidated Fund, Contingency Fund, Public Account).
- It provides Ways and Means Advances for temporary mismatches.
- It advises the government on monetary and banking matters.
- Monetary Policy Formulation:
- RBI is the monetary authority, formulating and executing monetary policy.
- It operates within the “Monetary Policy Framework” agreement with GoI.
- The Monetary Policy Committee (MPC), with GoI-appointed members, determines the policy rate.
- RBI’s decisions aim to maintain price stability while considering growth.