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India's external debt at $230.85 bn
March 31, 2009 20:41 IST
India owes $230.85 billion to the external world as debt as on December 31, 2008, which is slightly less than $254.6 billion of forex reserves the country enjoyed at that point of time.
The total external debt marginally increased by 2.8 per cent from $224.65 billion at end-September 2008, as commercial external borrowings by India Inc continued to enjoy major chunk of external debt, as the government swung into action by liberalising overseas debt regime after these sources of funds dried up.
According to an official statement here, external commercial borrowings increased by $4.6 billion to $66.16 billion with its share in total debt increasing to 28.7 per cent from 27.4 per cent at end-September 2008.
Comparison between these two periods assumes importance as external sources of funds dried up after Lehman Brothers filed for bankruptcy in mid-September.
The data showed that the share of short-term debt declined to 20.6 per cent at $47.48 billion as on December end, 2008, from 22.6 per cent at $50.68 billion as on September end.
After the East Asian crisis of late 1990s, large chunk of short-term debt is not considered good for economic health of a country.
India's long-term debt constituted 79.4 per cent of the total debt at $183.37 billion as on December 31, 2008, against 77.4 per cent as on September 30 that year.
NRI deposits declined marginally to $40.30 billion from $40.62 billion, despite increase in ceiling of interest rates paid to them on their deposits.
Government (Sovereign) external debt stood at $57.4 billion at end-December, 2008, while non-government debt amounted to $173.5 billion.
The share of non-government debt in total debt has increased steadily since March 2003. This trend continued during the first half of 2008-09, with the share of non-government debt in total external debt increasing further to 75.3 per cent.
However, it dipped fractionally to 75.2 per cent at the end of December 2008. The official statement said, "The focus of external debt management policy continues to be on maintaining debt within manageable limits."
This includes emphasis on raising sovereign loans on concessional terms with longer maturities, regulating the levels of commercial borrowing and their end-use, rationalising interest rates on NRI deposits, monitoring short term debt and encouraging non-debt creating capital flows.
US dollar continued to dominate debt, accounting for 53.1 per cent of total external debt as on December-end 2008, followed by Japanese Yen (15.9 per cent), Indian rupee (15.8 per cent), SDR (9.3 per cent) and Euro (3.8 per cent).