Hey All,
I got asked by PM to take this one on. So...
The reserve bank of India examines macro-economic environment and external conditions, and in using the guidelines it derives from these analyses, can decide the fiscal and monetary policy.
A. conditions, and in using the guidelines it derives from these analyses, can decide
PROBLEM: This modifier "in using" is confusingly placed here after the "and". There's no way to know what it's modifying. (Prepositional phrases are always modifiers)
B. conditions, and it uses the guidelines derived from these analyses in deciding
PROBLEM: No reason to have the "it" here, as the subject hasn't changed.
C. conditions and, in using the guidelines derived from these analyses, deciding
PROBLEM: Failed parallelism between "examines" and "deciding".
D. conditions and, using the guidelines derived from these analyses, decides
CORRECT: Parallelism between "examines" and "decides" is great. The participial modifier is a bit oddly placed, but it's legal.
E. conditions and, in its use of the guidelines it derives from these analyses, it decides
PROBLEM: No reason to add all these "its" everywhere. The middle modifier is illogical.
Hope that helps!
-t