With reference to 'Financial Stability and Development Council', consider the following statements : 1. It is an organ of NITI Aayog. 2. It is headed by the Union Finance Minister. 3. It monitors macroprudential supervision of the economy. Which of the statements given above is/are correct?

(a) 1 and 2 only
(b) 3 only
(c) 2 and 3 only ✓ UPSC's answer
(d) 1, 2 and 3

Why the answer is (c)

• The FSDC (2010) was set up by executive order on the Raghuram Rajan committee's recommendation; it is chaired by the Union Finance Minister (statement 2) with the heads of RBI, SEBI, IRDAI, PFRDA and finance secretaries as members.

• Its mandate covers financial stability, financial-sector development, inter-regulatory coordination, financial literacy and macroprudential supervision of the economy, including large conglomerates (statement 3).

• Statement 1 is wrong: it is under the Finance Ministry, not NITI Aayog.

• Hence 2 and 3 only, option (c).

Why the other options are wrong

(a) 1 and 2 only: Statement 1 is wrong: FSDC is not part of NITI Aayog.
(b) 3 only: Statement 2 is also correct: the Finance Minister chairs it.
(d) 1, 2 and 3: Statement 1 is wrong.

Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2016, held on 7 August 2016. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.