By IANS
New Delhi : India’s external debt rose 22.6 percent to $155 billion during the last fiscal with the falling value of the rupee contributing to 10 percent of the increase, official data showed Monday.
The external debt accounted for 16.4 percent of India’s gross domestic product (GDP), said the status report released by finance ministry that has been presenting India’s external debt position since 1990.
“As much as 56 percent of the increase was accounted for by commercial borrowings, followed by non-resident Indian deposits (16 percent), short-term debt (12 percent) and multilateral debt (11 percent),” it said.
“Sovereign debt at $48.6 billion at end-March 2007 accounted for around 31.4 percent of total external debt stock and 5.3 percent in relation to GDP,” the status report added.
External debt, or foreign debt, is the money that a country’s government, its citizens and corporations owe to creditors outside. It includes money owed to commercial banks, other governments or institutions like the World Bank.
According to the status report, while the total external debt stock rose during the year, the movement of other critical external debt indicators showed a mixed trend.
India’s debt service ratio, it said, showed a marked improvement, declining from 9.9 percent during 2005-06 to 4.8 percent last fiscal. Foreign exchange reserves accounted for 129 percent of the total debt stock.
According to the World Bank’s “Global Development Finance for 2007” report that contains data for 2005, the ratio of external debt to gross national income was the second lowest for India after that for China.
“The ratio of short-term debt to foreign exchange reserves was the lowest for India and the share of short-term debt in total debt was the second lowest,” said the official statement, drawing inputs from the World Bank report.
“India also accumulated the least external debt between 1990 and 2005,” stated the report.