Govt Establishes Debt Management Cell

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Union Finance Ministry has set up a Public Debt Management Cell (PDMC) to streamline government borrowings and better cash management with the overall objective of deepening bond markets.

The PDMC, to be placed at the RBI’s Delhi office, is an interim arrangement and will be upgraded to a statutory Public Debt Management Agency (PDMA) in about two years.

The interim arrangement will allow separation of debt management functions from RBI to PDMA in a gradual and seamless manner, without causing market disruptions.

In his Budget speech, Finance Minister Arun Jaitley had proposed to set up a PDMA to deepen Indian Bond market. It added that PDMC will have only advisory functions to avoid any conflict with the statutory functions of RBI. P

DMC has been tasked to plan government borrowings, including market borrowings and other borrowings, like Sovereign Gold Bond issuance.

It will also advise government on matters related to investment, capital market operations, administration of interest rates on small savings among others.

The middle office of the Budget Division will be subsumed into PDMC with immediate effect.

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