A Comprehensive Study of How Monetary Policy Transmits in India

Abstract

Monetary policy is essential in shaping economic outcomes, particularly in emerging economies like India. Its success relies heavily on how effectively it transmits through various channels, influencing economic factors such as interest rates, credit flow, and investment. This paper examines the mechanisms of monetary policy transmission in India, focusing on core channels such as bank lending, interest rates, exchange rates, and asset prices. It analyses how these channels affect different sectors of the Indian economy and assesses the overall effectiveness of these mechanisms in meeting policy objectives.