Independent Debt Management Office: Rationale, Scope and Structure

24 Pages Posted: 25 Nov 2013

See all articles by Kanagasabapathy K

Kanagasabapathy K

EPW Research Foundation

Charan Singh

Indian Institute of Management (IIMB), Bangalore

Date Written: November 25, 2013


Ever since the onset of financial sector reforms in India in early nineties, the proposal for separation of debt management from monetary management and setting up of an independent Debt Management Office (DMO) gained prominence. As both debt and monetary management became market oriented, the potential conflict between the two has surfaced. Since RBI is a major investor in government securities, and its market interventions through open market operations in government securities and liquidity management operations through CRR or LAF can be clouded by debt management objectives. The fiscal-monetary nexus in that sense cannot be underestimated. As the role of RBI is restricted to management of market loans, debt management should be viewed in a holistic manner while structuring the new DMO. The interests of all stakeholders, namely, the central government, state governments and the Reserve Bank also need to be kept in view. The Institutional and organisational structure of DMO across the globe can serve as vital leads in crafting the structure of India DMO.

Keywords: Debt Management Office, Fiscal- Monetary Nexus, Transparency, Independency

Suggested Citation

Kuppuswamy, Kanagasabapathy and Singh, Charan, Independent Debt Management Office: Rationale, Scope and Structure (November 25, 2013). IIM Bangalore Research Paper No. 431, Available at SSRN: or

Kanagasabapathy Kuppuswamy (Contact Author)

EPW Research Foundation ( email )

C-212, Akurli Industrial Estate
Akurli Road
Mumbai, Maharashtra

Charan Singh

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
080-26993818 (Phone)

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