The All-India RBI Employees Association has expressed its concern over the Centre reaching an ‘understanding’ with RBI on the Public Debt Management Agency (PDMA) and the Monetary Policy Committee (MPC).
Contentious issues Finance Secretary Rajiv Mehrishi has gone on record saying these would be given proper shape through a Bill to be piloted during the winter session of Parliament.
The details will be known only when the Bill is placed before the House, which the Association finds puzzling, Samir Ghosh, General Secretary, said in a letter to the RBI Governor. These issues are contentious and have triggered extensive and intensive discussions in the public realm. Eminent personalities, including economists and central bankers, have been articulating their views.
The RBI has been conducing the public debt management function of both the Central and State governments for about eight decades and without any glitch, Ghosh recalled.
‘Sketchily detailed’ Why this job should be taken away from the Central Bank to a PDMA and how this will serve the country better than hitherto, requires to be clarified in greater detail rather than what has been ‘sketchily detailed’.
Convergence of views is most necessary on a sensitive matter like this in the long-term interests of the country, Ghosh said.
Global concerns It is understood that once the proposed severance takes place, it will be irreversible. Many global authorities too have expressed reservations about delinking the public debt management function from the RBI.
There is also a belief that the proposal to revise upward FII investment in government bonds as a sequel to the delinking is fraught with adverse long-term impact for the economy.