The Syndicate Bank Staff Association (SBSA), an affiliate of the National Organisation of Bank Workers (NOBW), has called upon the Union government to set up an autonomous debt management office (DMO) to manage the debt of both the Union and State governments.
In a statement on Saturday, association national secretary K.S. Bhatt said the aim of the proposed DMO was to separate debt management from monetary management of various banks so that any conflict of interests between the two could be avoided.
He said the interest rate setting and use of other instruments such as cash reserve ratio and open market operations by the Reserve Bank of India (RBI) could be clouded by debt management objectives.
Mr. Bhatt said the government should come out with a White Paper, explaining whether the office should manage external debt, before setting up a full-fledged DMO. The State governments could not directly borrow money from abroad as the sovereign risk was essentially borne by the Centre. It was very important that the relationship between the Union and the State governments and that of both with the RBI be taken into account before giving shape to the structure of DMO.
Mr. Bhatt said the Union Budget presented by Union Finance Minister Pranab Mukherjee was a routine budget as far as the salaried class was concerned.
The Budget did not fetch anything for the common man and the salaried middle-class, he alleged.