KATHMANDU: Government has established the Public Debt Management Office with a view to manage public debt in an integrated manner.

Finance Minister Yubaraj Khatiwada inaugurated the office in Putalisadak amidst a programme here today. The office established as a subordinate body of the Ministry Finance will function autonomously.

Prior to this, Nepal Rastra Bank (NRB) dealt with proceedings related to internal borrowings and Public Debt and Investment Section at the Office of the Auditor General owned the responsibility of managing external and domestic debt.

The newly established office will look after works relating to debt management including some works of the Finance Ministry.

According to Office Chief, Bishnuraj Dhakal, the office will support effective implementation of the government's fiscal and monetary policies. It will invest in public enterprises and recover loans.

Moreover, it has been given the additional responsibility of looking after some tasks relating to the internal and external debt executed by the International Cooperation Coordination Division and Economic Policy Analysis Division of the Ministry of Finance. It has also been assigned to prepare a draft of the public debt policy.

On the occasion, the Finance Minister expressed hope that the government's fiscal and monetary policies will become more effective with the office coming into operation.

"Capital is needed for carrying out development activities. For this, government resources are not enough and development cannot depend only on grants. The office will matter a lot in managing public debt," he said.

Approximately Rs 10 billion is required for physical infrastructure development in the next two years. Likewise, Rs 20 billion is required to upgrade the East-West Highway, complete railway project and produce 5,000 megawatts electricity, Minister Khatiwada said.

He also emphasised public debt investment in production, infrastructure development and capital build-up.

NRB Governor Chiranjivi Nepal expressed hope that the autonomous body would help manage capital market of the government and internal debt. Nepal added that the office would also help in collecting foreign debt on time.

Joint Secretary at the Ministry of Finance, Mukunda Poudel pledged that the Ministry would provide necessary support to manage the office.