The government is working on setting up an independent Public Debt Management Agency (PDMA) to manage the Centre’s borrowing programme.
Senior Finance Ministry officials said discussions are still on and the clear contours of the proposed agency as well as the final roadmap would require more time.
In Union Budget 2015-16, Finance Minister Arun Jaitley had initially announced that the government would go ahead with the long pending proposal to set up a PDMA. But two months later, in May, during the discussion of the Finance Bill, 2015, he had withdrawn it from the Bill.
However, the Finance Ministry is likely to move ahead with another key Budget announcement, the monetary policy committee. It is expected to table enabling legislations in the forthcoming Winter Session of Parliament.
“Amendments to the Reserve Bank of India Act are expected to be introduced when Parliament re-convenes next month to ensure that the committee is in place by early next year — in time for the start of the new financial year,” said an official familiar with the development.
The Finance Ministry is understood to have finalised the Cabinet note for setting up of the monetary policy committee and is likely to seek approval by early next month.
After months of discussions, the Finance Ministry and the Reserve Bank of India have finalised the contours of the Monetary Policy Committee. Under the proposal, the panel will consist of six members, including the RBI Governor, who would have the casting vote in case of a tie.
While three of the committee members will be from the central bank, another three, including external experts, will be nominated from the government side.
Collective decision In line with the practice followed by many countries including the US and the UK, the Monetary Policy Committee will be responsible for deciding on interest rates.
It will replace the current practice of the RBI Governor deciding on interest rates.