Business
Rajan for independent public debt management agency
New Delhi, March 22
Reserve Bank of India
Governor Raghuram Rajan on Sunday advocated keeping the proposed public
debt agency independent of the government as well as the RBI to ensure
fiscal discipline.
"Public Debt Management Agency as a
professional organisation, independent of the central bank and
government, is something that is desirable," he told reporters here
after Finance Minister Arun Jaitley's post-Budget address to the RBI
board.
Such an independent structure, Rajan said, "puts some
discipline on the government debt process and also frees regulation of
the need to create some sort of financial impression".
The RBI currently oversees public debt management.
Jaitley,
in his first full budget last month, proposed setting up of a PDMA
with the aim of minimising the cost of raising and servicing public debt
over the long term within an acceptable level of risk at all times,
under the general superintendence of the central government.
As per the Budget 2015-16 proposal, the new agency will have a CEO and members from the government and RBI.
As
per the Finance Bill 2015-16, the central government will entrust the
PDMA with the issue of government securities including short-term
papers.
The agency will be responsible for making payments to
holders of government securities, in accordance with the terms of such
government securities, it said.
Lauding the move, Rajan said: "So I think as a concept and enabling that concept is a very worthwhile move."
The government's net borrowing through long term bonds were pegged at Rs.453,000 crore in the current fiscal.
For
2015-16, the budgeted target for borrowing in current fiscal was
Rs.600,000 crore, but the government will raise only Rs.592,000 crore
from the markets.