The paper contains the text of the lecture delivered by the author at a seminar organized by the Department of Economics, M.S.University, Baroda under its UGC Special Assistance Programme during December 20-21, 1986. It highlights the state of the art with regard to the role and conduct of monetary policy, and throws some light on this aspect for India. In particular, it argues that monetary policy is significant not only with regard to the price level and in the long-run, but also with respect to real GNP and in the short-run. Further, it supports whole-heartedly many of the recommendations of the Chakravarty Committee on the way the monetary policy should be conducted in India.