Aditya Singh Rajput and Shubho Roy.
In the last two years, we have had a debate about monetary policy reform. On June 27, 2016, the Government, through the Finance Act, 2016, amended the Reserve Bank of India Act, 1934 and created a statutory Monetary Policy Committee (MPC). This is an 'executive MPC', which will control monetary policy. Section 222 of the Finance Act, 2016 introduced Chapter IIIF in the RBI Act titled Monetary Policy. In this Chapter, section 45ZL has a drafting error.
Section 45ZL requires RBI to publish the proceedings of meetings of the MPC. RBI is obliged to publish MPC meeting minutes, with three documents: The resolution of the meeting, The votes of individual members, and the statement of each member explaining their vote. Here is the text of S.45ZL:
The Bank shall publish, on the fourteenth day after every meeting of the Monetary Policy Committee, the minutes of the proceedings of the
meeting which shall include the following, namely:-
(a) the resolution adopted at the meeting of the Monetary Policy Committee;
(b) the vote of each member of the Monetary Policy Committee, ascribed to such member, on resolutions adopted in the said meeting; and
(c) the statement of each member of the Monetary Policy Committee under sub-section (11) of section 45ZL on the resolutions adopted in the said meeting.
(Emphasis added)This has an error. There is no subsection (11) in Section 45ZL. The correct cross-reference should have been to subsection (11) of Section 45ZI which reads:
Each Member of the Monetary Policy Committee shall write a statement specifying the reasons for voting in favour of, or against the proposed resolution.In this case, this drafting error is minor and is unlikely to have substantial legal effects. However, it reveals weaknesses of the process through which laws are drafted, which could easily have major legal effects in other cases. This is not an isolated problem. As an example, the recent Insolvency and Bankruptcy Code has numerous cross-referencing mistakes.
The authors are researchers at the National Institute of Public Finance and policy, New Delhi. The authors thank Pratik Datta for valuable inputs.