The Prime Minister’s Office (PMO) has asked the FinanceMinistry to conduct a detailed study on issuance of overseas sovereign bonds inlight of concerns raised by several experts, sources said.
The PMO has asked the Finance Ministry to examine theconcerns raised by formers RBI governors and deputy governors on issuance ofsuch bonds and its implications.After the detailed consultation, a considered view will be taken, the sources added.
Finance Minister Nirmala Sitharaman in Budget 2019-20announced that the government would start raising a part of its gross borrowingprogramme from external markets in foreign currencies. She added that India’ssovereign external debt-to-GDP level is among the lowest globally at less than5 per cent. The idea, however, has been criticised by many including economistsand allies of the ruling BJP alike, as they argued that it could createlong-term economic risks by exposing the government’s liabilities to currencyfluctuations.
Rathin Roy, a member of the Prime Minister’s EconomicAdvisory Council, has called for a discussion on sovereign bonds instead of an‘imperial announcement’ of the borrowing programme.
