Debate on separation of public debt office from monetary management continues

Separation of the public debt office from monetary management is being debated at policy level since as early as 1997, during which five finance ministers and three RBI governors have been at the helm. A working group on separation of debt management from monetary management submitted its report to the Reserve Bank of India in December 1997.

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It had then recommended, the separation of the two functions and establishment of a company under the Indian Companies Act to take over the debt management function.

The issue was further revisited in 2001, when the finance ministry came out with a report of the internal expert group on the need for a middle office for public debt management. Subsequently, the issue was revisited again in 2004 by another finance ministry committee.

Things moved a little with finance minister P Chidambaram announcing the government's intention to set up separate debt management office in his Budget speech of 2007.

Two finance ministry committees touched upon the subject subsequently. Besides, in 2008, another working group on debt management was set up to study the pros and cons of setting up a national treasury management agency, which again did not come out with any specific recommendations.

But it's been four years since the proposals have gathered dust, with no policy level talk since 2007.

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