Govt to set up PDMA via executive order

Highlights

The government on Friday said an independent office to manage the Centre\'s debt will be set up through an executive order till the time a proposed bill is passed by Parliament.

It will be tasked with setting borrowing calendar, deciding on maturities of securities on behalf of the govt

New Delhi : The government on Friday said an independent office to manage the Centre's debt will be set up through an executive order till the time a proposed bill is passed by Parliament.

In its Mid-Year Economic Analysis presented in Parliament, Finance Ministry said it is in "consultations with the Reserve Bank of India" on setting up a Public Debt Management Agency (PDMA).

Modelled on independent public debt offices in developed economies like the US and the UK, India's separate debt management office will be charged with selling debt on behalf of the government after taking away such powers from the RBI.

The ministry has proposed to make PDMA an autonomous agency that will act as an investment banker to the government and will raise capital through bonds for the government.

It will be tasked with setting the borrowing calendar as well as deciding on maturities of securities to be issued on behalf of the government.

"Detailed road map has been prepared for establishing PDMA," the review said. "In the meantime, it is proposed to set up an executive order non-statutory PDMA."

The Ministry said draft Cabinet Note for inter-ministerial consultation has been circulated. PDMA will resolve a conflict of interest the RBI now faces with its formal mandate to control inflation and separately having to manage the government's fundraising.

Finance Minister Arun Jaitley had proposed setting up a PDMA "which will bring both India's external borrowings and domestic debt under one roof."

There are precedences of government setting up non- statutory bodies before legislations are passed by Parliament.

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