Wednesday, Jun 16, 2004
External debt rises to $112 b
By Our Special Correspondent
NEW DELHI, JUNE 15. India's external debt stood at $112.1 billion at the end of December 2003, going up by $6.8 billion from the end-December 2002 level of $105.3 billion, an official release said here today. The increase is explained by the surge in non-resident Indian (NRI) deposits, while other components broadly offset each other.
According to the 10th Status Report released by the Government today, India's external debt indicators have improved in the recent years. For instance, debt to the gross domestic product (GDP) ratio declined from 28.7 per cent in 1990-91 to 20.2 per cent in 2002-03. The rate of accumulation of external debt came down in the last decade as policy focus shifted in favour of non-debt creating flows such as foreign direct investment and portfolio investment. Other critical indicators such as ratios of short-term to total debt and short-term debt to foreign currency assets too have improved over the years. Debt service payments as a proportion of current receipts (that is, the debt service ratio) declined from 35.3 per cent to 15.8 per cent between 1990-91and 2002-03. However, debt service ratio rose to 18.1 per cent during April-December 2003 mainly because of the redemptions of Resurgent India Bonds (RIBs). If RIB redemptions are excluded, the debt service ratio works out to 11.1 per cent.
In terms of international comparison, India improved its rank among the top 15 debtor countries from the third debtor after Brazil and Mexico in 1991 to eighth in 2002 after Brazil, China, the Russian Federation, Mexico, Argentina, Indonesia and Turkey.
Under the indebtedness classification, the World Bank upgraded India from moderately indebted to less indebted country in 1999. While the ratio of concessional to total debt in the highest, the debt to gross national product (GNP) ratio is the second lowest after China in 2002. While China's debt to GNP ratio was 13.4, India's was 20.7 while for Brazil it was 52.5 and the highest was for Argentina at 138.4. Pakistan's debt to GNP ratio was 56.5, for Bangladesh it was 34.2 and for Sri Lanka 58.9.
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