Rajan says no differences over PDMA; wants independent agency

Ruling out any differences with the government over creation of a Public Debt Management Agency (PDMA), RBI Governor Raghuram Rajan today said the new body should be "suitably independent of influences".
"I think the government and the RBI will sit down. As it (government) sets it up, we will be in constant dialogue to see how we can make it function effectively. There is no difference of opinion on this," Rajan said.
"I think we have said repeatedly that we are not against the idea of the PDMA which is suitably independent of all influences," the RBI chief told reporters here.

Rajan's comments come in the backdrop of the government's recent decision defer the plan to set up the PDMA. The government dropped a provision in this regard from this year's Finance Bill, saying the proposal needs more consultation with the central bank.
The government has also done away with another provision which sought to shift the regulation of the secondary market for government securities from RBI to the capital markets regulator Sebi. The revised Finance Bill has been passed by the Parliament.
Addressing the media after a meeting of RBI's central board, Rajan also said that the financial sector has changed a lot and this has necessitated the need for changes in the some laws.

The board discussed the legislative changes that would be needed for the smoother functioning of the financial sector, including those to tackle the issues arising from the limits on derivatives trading because the participants cannot net positions.

"The financial sector has changed a lot. There is clarity needed. These are not mega changes; more in the nitty-gritty of what needs to happen," Rajan said.
On the problems faced in passage of crucial legislations like the Land Acquisition Bill and the GST Bill, which spooked the market earlier this week, Rajan said this was part of the Parliamentary process.
"I read this morning that the Parliament has been working at 118 per cent of its scheduled time. That seems to suggest that it is working overtime. So, I can't quarrel with that. There is a process in all this (passing of legislation) and that process is taking place," the RBI Governor said.

"I think the government has very clearly expressed its intent to move forward and the parliamentary process has to be respected. That is taking place," he said.
Deputy RBI Governor Urijit Patel, in-charge of the monetary policy department, said that the RBI plans to come up with an employment survey, jointly with the Central Statistics Office, which may be on a quarterly basis.
"It has been conveyed to us that it should happen some time this year and will get some regular data on employment. At the moment, we don't know how frequent it will be, but quarterly sounds reasonable to me. Some other countries do this on a monthly basis but to start with monthly, I presume, would be very difficult to begin with," he said.