Which of the following is not decided by the Reserve Bank of India while framing monetary and credit policy?

Introduction / Context:
The Reserve Bank of India RBI is the central bank of the country and is responsible for formulating and implementing monetary policy. It influences interest rates liquidity and credit conditions in the economy. However not every economic or financial parameter is decided by the RBI. This question checks whether you can distinguish between central banking functions and decisions that are taken by the government through other mechanisms.

Given Data / Assumptions:
The question provides the following key information.

• We must identify a parameter that is not decided by the Reserve Bank of India.
• The options include Repo and Reverse Repo rates.
• Marginal Standing Facility rate is mentioned.
• Statutory Liquidity Ratio is given as another choice.
• The Rate of Dearness Allowance to government employees is also listed.

Concept / Approach:
RBI uses policy tools such as Repo, Reverse Repo, Marginal Standing Facility and Statutory Liquidity Ratio to control money supply and credit. These are clearly within the central banks domain. On the other hand Dearness Allowance is a cost of living adjustment paid to government employees and pensioners. The rate and revisions of Dearness Allowance are decided by the central government in consultation with pay commissions and related bodies, not by RBI. Thus we can identify the correct option by matching each parameter with the responsible authority.

Step-by-Step Solution:
Step 1: Recall that Repo rate and Reverse Repo rate are benchmark rates directly fixed by the Reserve Bank of India. Step 2: Remember that Marginal Standing Facility rate is another RBI window through which banks can borrow overnight funds and its rate is also set by RBI. Step 3: Know that Statutory Liquidity Ratio is the percentage of deposits banks must hold in liquid assets and is prescribed by RBI under banking regulation. Step 4: Identify that Dearness Allowance is a benefit for government employees which is revised periodically based on inflation indices by the government, not by RBI. Step 5: Therefore conclude that the Rate of Dearness Allowance to government employees is not decided by the Reserve Bank of India.

Verification / Alternative check:
You can verify this by checking official RBI publications such as Monetary Policy statements which list policy rates like Repo, Reverse Repo, MSF and SLR but make no reference to Dearness Allowance. On the other hand central government notifications about pay commission recommendations clearly show that DA calculations come under the Department of Expenditure Ministry of Finance. This clear separation of roles confirms that Dearness Allowance is outside RBI jurisdiction.

Why Other Options Are Wrong:
Option A Statutory Liquidity Ratio is an important prudential requirement set by RBI to ensure that banks maintain adequate liquid assets. Option B Marginal Standing Facility rate is directly announced by RBI and used as a penalty rate for emergency borrowing. Option C Rate of Repo and Reverse Repo are core policy rates that signal the stance of monetary policy and are central to RBI function. Since all these are explicitly decided by RBI they cannot be the right answer to this question.

Common Pitfalls:
Some candidates wrongly assume that because Dearness Allowance is an economic parameter it might be influenced by RBI. Others may not recall the exact role of RBI in setting SLR and MSF and may incorrectly mark one of those options. Confusion also arises when learners do not differentiate between monetary policy decisions and government salary related decisions. A clear understanding of the separation of powers between RBI and the central government prevents such mistakes.

Final Answer:
The Reserve Bank of India does not decide the Rate of Dearness Allowance to government employees.