The government on Tuesday appointed three external members -- Ram Singh, Saugata Bhattacharya and Nagesh Kumar -- to the RBI's rate-setting Monetary Policy Committee for four years.

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The central government has reconstituted the Monetary Policy Committee (MPC) of RBI, the finance ministry said in a statement.

Ram Singh is the director of the Delhi School of Economics, Saugata Bhattacharya is an economist, and Nagesh Kumar is the director and Chief Executive, Institute for Studies in Industrial Development, New Delhi.

The panel, which decides interest rates, is headed by the Reserve Bank of India Governor.

The reconstituted MPC is scheduled to have its first meeting from October 7 to 9. Following the MPC meeting, Governor Das will announce the bi-monthly monetary policy on October 9.

The members of the MPC appointed by the central government will hold office for a period of four years, with immediate effect or until further orders, whichever is earlier, the statement said.

The government notification dated September 29, 2016, constituted the MPC with external members being Pami Dua, Chetan Ghate and Ravindra H Dholakia.

The MPC was constituted in 2016, following the finalisation of the Monetary Policy Framework Agreement that introduced inflation targeting.

The inflation target was set at 4 per cent with a tolerance band of plus/minus 2 per cent.

The new members have replaced Ashima Goyal, a member of the Economic Advisory Council of Prime Minister, Shashanka Bhide, senior advisor at the National Council for Applied Economic Research and Jayanth Varma, who is a professor at the Indian Institute of Management, Ahmedabad.

The six-member MPC is chaired by the RBI governor. Its official members include the Deputy Governor in charge of monetary policy and the Executive Director in the Monetary Policy Department.

According to the rules, the rate-setting committee requires at least four members to be present at a meeting.

In 2020, while the search committee, headed by Cabinet Secretary Rajiv Gauba, zeroed in on the candidates and recommended them to the government, the appointment process was delayed as certain processes, such as security clearances of some members, were not completed in time.

The search committee included RBI Governor Shaktikanta Das, NITI Aayog Vice-Chairman Suman Bery, and Economic Affairs Secretary Ajay Seth.