Foundation for Economic Growth and Welfare or EGROW Foundation, has set up a Shadow Monetary Policy Committee (SMPC) to present views on monetary policy, and direction of interest rates. SMPC will meet every two months, one day before the RBI’s Monetary Policy Committee.

SMPC aims to transparently discuss the interest rate scenario considering economic conditions within the country amidst the global situation. The aim is to build and contribute to the debate on macroeconomics and monetary policy by a set of economists thinking independently on these complex issues. The objective of this exercise is also to provide inputs to the officials involved in policy making, after extensive discussions and deliberations.

Accordingly, SMPC met on December 4 from 6 to 730 pm at IIC to evaluate the economy, forecast growth, and analyse the path of interest rates, on their own, in the future.

The details are in link below while key recommendations of SMPC were as follows –

a) To revise the stance from calibrated tightening to neutral

b) To reduce the Repo rate

c) To enhance liquidity in the economy

d) To consider reducing CRR

e) To revisit the concept and conditionality of PCA

f) To consider setting up a banking sector reforms commission in line with the earlier two Narasimham Committee Reports of the 1990s

Input from experts