Why not do it directly?

Graeme Wheeler, then Governor of the Reserve Bank of New Zealand, the first to adopt inflation targeting, said in October 2015 that monetary policy cannot influence long term economic decisions, cannot stimulate increased spending by households or industry and has little effect on long term real interest rate. At best it can influence actual inflation and inflation expectation over the medium term. VA Nageswaran does not agree. "Central banks do not influence almost anything," he wrote. All developed countries target an inflation rate of 2% but the consumer price index rose 1.3% in the year to August in the US, despite promising to keep interest rate near zero till 2023, while in the European Union, inflation rose to a high of 1.7% in January but fell to 0.8% in July 2020, despite a negative interest rate of  - 0.5%. So, central banks cannot push inflation up in developed countries and are ineffective in pushing it down in developing countries because inflation is caused by restrictions in supplies. The first Monetary Policy Committee (MPC) was set up in the Reserve Bank of India (RBI) with a mandate to keep retail inflation between 2 and 6%, with a target of 4%. Although GDP growth was robust for most of its term, other indicators such as credit growth, corporate investments, industrial output, household consumption and real wages were weak, wrote Kwatra and Devulapalli. "There was also growing frustration in the government, especially in the Finance Ministry that was led by Arun Jaitley at that time, about the RBI not bringing down interest rates in the economy." Two independent governors of the RBI were forced to resign over differences with the government and Shaktikanta Das, a retired civil servant who had worked in the Finance Ministry, was appointed governor in 2018. He has slashed interest rate by 250 basis points since last year, though minutes of the MPC showed that it was persistently worried about retail inflation. The consumer price index (CPI) came in at 6.69% in August. The RBI could not stop demonetization despite its reservations, it cannot solve problems of a badly planned and badly implemented goods and services tax (GST), or the sudden imposition of total lockdown with just 4 hours notice when coronavirus cases were just 500. "Throughout history, the Union government has deployed three levers to control the RBI," wrote Bhattacharya, Bhatia and Devulapalli. The RBI needs sanction of the government, can be told what to do and the government appoints the governor and board members. If its only function is to reduce interest rate as told, why waste so much money on the RBI. A toothless RBI is useless. The Finance Ministry should directly manage monetary and currency policies. It's doing so anyway. By proxy.