The effectiveness of monetary policy critically depends upon how well the transmission mechanism functions, so that the desired impact on output and inflation is achieved. The purpose of this paper is to study the transmission mechanism of monetary policy by analyzing the impact on inflation and output during multiple indicator regime (1998-99 to 2014) in an emerging economy-India. The Inflation Targeting Regime is also briefly outlined alongwith the impact on output and inflation. Using quarterly data for the period 1997 to 2017, the paper uses weighted average call money market rate as a proxy for the policy rate and evaluates the strength of the interest rate channel. We use a conventional Structural vector auto regression (SVAR) methodology to evaluate the efficacy and show the impluse response functions. Our results find that changes in the policy rate impact output growth steeply with a lag of about two quarters and the impact on inflation is maximized after three quarters. The study concludes that the monetary policy in India has a significant impact on output and inflation in the short-to-medium-run. After the policy shock, the fall in the output growth rate is of greater magnitude than the fall in inflation.

Abstract
1. Introduction
    1.1. Pre-monetary Targeting (Independence to1984-85)
    1.2. Monetary Targeting (MT, 1984-85 to 1997-98)
    1.3. Multiple Indicators Approach (MI, 1998-99 to2014 Onwards)
    1.4. Inflation Targeting (IT) – (From 2015Onwards)
    1.5. Monetary Policy Transmission Mechanism:The Channels
2. Literature Review
3. Data and Methodology
4. Results and Discussion
    4.1. Results of the SVAR Model
    4.2. Inflation Targeting Regime Analysis
5. Policy Implications and Conclusion
References

• Madhvi SETHI(Symbiosis Institute of Business Management Bangalore, Symbiosis International (Deemed University) Pune) Corresponding Author.
• Saina BABY(Symbiosis Institute of Business Management Bangalore, Symbiosis International (Deemed University) Pune)
• Vandita DAR(Symbiosis Institute of Business Management Bangalore, Symbiosis International (Deemed University) Pune)