The new Public Debt Management bill has been registered in the Lower House of the parliament. In the preamble, the bill has defined its objective as to properly manage public finance by maintaining coordination between fiscal and monetary policy, and by managing domestic and foreign loans as per the needs of the changed context. The bill has introduced Public Debt Management Office (PDMO), a separate body which will be handling all the matters related to management of public debt including estimation of borrowing required for a fiscal year, identification of the sectors for mobilization of the public loans, issuance and auctioning of the debt instruments, among others which used to be jointly handled by the central bank and Financial Comptroller General’s Office (FCGO) previously. At the advent of federalism, a new act for managing public debt was, of course, necessary as the newly formed sub-national governments also have been given rights to retrieve loans for financing their expenditure needs. However, some of the aspects of the bill need reconsideration for successfully managing government finance in all three levels of government. This brief will focus on some of these issues.
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