INSUBCONTINENT EXCLUSIVE:
sovereign bonds, two sources with knowledge of the development said on ThursdayThe office has asked the finance ministry to seek wider
consultation from stakeholders before proceeding with any plans, said the sources, who declined to be identified as they were not authorised
to speak to the media.The Ministry of Finance and the PMO declined to comment on the matter.This month, Finance Minister Nirmala Sitharaman
said in her budget speech that the government would look to issue overseas foreign currency sovereign bonds
The idea, however, has been criticised by former heads of the Reserve Bank of India, economists and allies of the ruling Bharatiya Janata
Party alike, as they argued it could create long-term economic risks by exposing the government's liabilities to currency fluctuations.The
benchmark 10-year bond yield rose as much as 11 basis points to 6.55 per cent after the news of a rethink of the proposal, as market
participants fear this may boost government borrowing in the domestic market
The PMO was not properly apprised of the consequences of overseas dollar-denominated bonds by outgoing finance secretary Subhash Chandra
Garg, who originally pushed this idea, said one of the two sources, who is an adviser to the government.The proposal to raise funds via
overseas bonds is likely to be withdrawn, and as an alternative, the government could raise funds through rupee-denominated bonds in the
overseas market, he added
Mr Garg, a high-flying finance ministry bureaucrat, was in a surprise move transferred to the less high-profile power ministry late on
Wednesday.Mr Garg was a central figure amid the tension that arose between the government and the RBI in 2018, that culminated with the
sudden departure of former RBI governor Urjit Patel in December.It was not immediately clear whether Mr Garg's transfer was linked to the
fallout from the overseas bond proposal, but a third source told news agency Reuters on Thursday that Mr Garg had applied for voluntary
retirement after being handed the transfer.Mr Garg told media later on Thursday that he had sought voluntary retirement, but would serve out
a notice period of three months and take charge as power secretary until then.He declined to comment on the sovereign bond issuance.The
finance ministry declined to comment on Mr Garg's transfer, or voluntary retirement application.Get Breaking news, live coverage, and
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