Union Government to Set up Public Debt Management Cell
Finance Ministry Arun Jaitley has proposed to set up a Public Debt Management Cell (PDMC) . PDMC will strengthen and deepen the reach of bond markets in India, streamline government borrowings and promote better cash management.
Key Facts
- PDMC housed at the RBI՚s Delhi office.
- Short-term arrangement upgraded to a statutory Public Debt Management Agency (PDMA) in about two years.
- Staffed from 15 debt managers from Budget Division, RBI, current Middle Office and other government units.
- Permit separation of debt management from RBI slowly and seamlessly without causing market disturbance.
- Transition process from PDMC to PDMA would be implemented by a joint implementation committee (JIC) , working under the supervision of the monitoring group on cash and debt management.
- Middle Office of the Budget Division in the Union Finance Ministry will be listed under PDMC.
- The Joint Secretary (Budget) , Department of Economic Affairs of the Finance Ministry will be in-charge of the PDMC.
- To avoid conflict with the statutory functions of RBI, PDMC will have only advisory role.
Functions of PDMC
- Plan government borrowings, including market and other borrowings such as, Sovereign Gold Bond (SGB) issuance.
- Develop IDMS (Integrated Debt Database System) as a Centralised database for all liabilities of government on a near real time basis.
- PDMA, will bring India՚s external borrowings and domestic debt under a single system.
Background on PDMA
- RBI recognised the need for PDMA in its Annual Report 2000 - 01.
- Supported by the Financial Sector Legislative Reforms Commission in 2013.
✍Examrace Team at Oct 10, 2016