The Finance Ministry has decided to set up a Public Debt Management Cell (PDMC) till the statutory Public Debt Management Agency (PDMA) is constituted in the near future, the Department of Economic Affairs said in a statement.
The rationale behind the move is to allow a gradual separation of debt management functions from the Reserve Bank of India (RBI) to the statutory body without causing market disruptions. The interim cell is expected to be upgraded to the PDMA in about two years.
The PDMC will only have an advisory role to avoid conflict with the debt-management functions currently conducted by the RBI. Some of the functions include:
- Plan government of India's borrowings
- Manage central government liabilities
- Monitor the government's cash balance
- Foster a liquid and efficient market for government securities
- Undertake requisite preparatory work for the PDMA
The Joint Secretary (Budget) from the Department of Economic Affairs will be in-charge of the interim cell. The 15-member PDMC will include experienced debt managers from the RBI, budget division, and other government units and will initially function out of the RBI's Delhi office.
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