People watch the budget on the BSE screen in Mumbai on Monday. (PTI)
Mumbai, Feb. 17: The government is planning to go ahead with a “non-statutory” public debt management agency because it has still not been able to table the bill.
“Pursuant to the announcement in the budget speech of 2011-12, the government is ready with the public debt management agency (PDMA) bill. Following precedent, it is proposed to establish a non-statutory PDMA that can begin work in 2014-15,” Chidambaram said in his interim budget speech today.
However, he did not elaborate on the precedent that it has followed or the way the government will go ahead in establishing the non-statutory office.
A public debt management office is an independent government agency that raises money from the markets for the government.
Former finance minister Pranab Mukherjee had mooted the proposal to introduce the bill.
The budget for 2007-08 had backed the suggestion to establish a debt management office (DMO) in the government to separate debt management from the monetary management functions of the Reserve Bank of India.
The plan was to first set up a middle office to facilitate the transition to a full-fledged office.
The middle office was set up in September 2008.
Some of the responsibilities of the middle office include piloting the evolution of the legal and governance framework towards an independent debt office, formulation of annual debt issue strategy and periodic calendars of borrowing and forecasting cash and borrowing requirements.
Banking circles said the government’s plan was to set up the non-statutory body till Parliament passed the bill.
They, however, said the effectiveness of such a body remained to be seen.