Public Debt Management : NITI Ayog View

NITI Aayog has made strong case for setting up independent Debt Management Office for better servicing of loans that will lead to substantial reduction in India’s interest payment.

At present, government debt, including market borrowing, is managed by Reserve Bank of India (RBI).

Setting up independent Debt Management Office will help to resolve issues relating to conflict of interest as RBI decides on key interest rates as well as undertakes buying and selling of government bonds.

The setting up of Debt Management Office has been one of the top priority of government for bringing reforms in financial sector.

It will divest RBI of its dual and often conflicting roles as banker and manager of Central Government’s borrowing.

It will also facilitate in better planning and management of domestic and foreign market borrowings of Central Government.

It will also help in strengthen bond market and help to promote investment.

It will be in pursuance global practice of shifting public debt management from central bank to a debt management office.