Bills on the anvil

.....The Debt Management Office is proposed to be set up through legislation in the Finance Ministry for better management of public debt. The government has proposed to set up an independent DMO, aimed at separating the RBI's roles as the decider of interest rate in the market and being the banker to the government. At present, both the government's debt and fresh borrowings are managed by the central bank. In his 2011-12 Budget speech, Finance Minister Pranab Mukherjee had mooted the proposal to introduce the Public Debt Management Agency of India Bill. The Reserve Bank of India has opined against setting up a separate entity, DMO, to manage the sovereign debt of the government, saying only the central bank has the requisite expertise to manage market volatility. RBI had further said that in order to achieve monetary and financial stability, separation of debt management from central bank seems to be a "sub-optimal choice". .......

Read....... The Hindu