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India's debt-GDP ratio up 2 per cent during 1999-2000: Survey

India's debt-GDP ratio went up from 51 to 53 per cent during 1999-2000 and was expected to rise further to 54 per cent by March end 2001, the Economic and Social Survey of Asia and the Pacific (ESCAP) 2001 said.

"A high level of domestic debt overhang could lead to higher interest rates, crowd out private investment and pose debt refinancing and servicing problems," it said.

Lauding efforts on major expenditure control measures of India and the fresh impetus to divestment and privatisation programme, the survey said "revenue shortfalls and expenditure overruns meant that the central government deficit for 2000-01 was likely to be higher than the target."

India's monetary policy had been directed towards moderating the downward pressures on the exchange rate in the wake of East Asian crisis in 1997-98, it said, adding "the focus in early 2000-01 shifted towards supporting a recovery in the industrial sector."

Despite a higher inflow of FDI and the proceeds from the India Millennium Deposits, the UN said "there was a decline in net capital inflows to India from $10.7 billion in 1999-2000 to $8.7 billion in 2000-01."

Foreign investment, which had fallen from $5.38 billion in 1997-98 to $2.31 billion in 1998-99, surged to $5.12 billion in 1999-2000, some 42 per cent coming from FDI, it said.

"This sharp turnaround was attributable to the relatively stability of the domestic currency, broad-based industrial growth and the easing of economic sanctions on India by developed countries," the survey said.

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