By IANS,
New Delhi : India’s external debt rose to $305.9 billion by end-March 2011, registering a gain of $44.9 billion or 17.2 percent during the 2010-11 fiscal due to higher commercial borrowings and short-term trade credits, official data showed Friday.
The share of commercial borrowing in the total external debt has increased from 19.7 percent at end-March 2005 to 28.9 percent at end-March 2011.
“The changing composition of debt in favour of commercial borrowing, however, is also an indication of maturing market economy and the increasing role that corporate sector is playing in sustaining high growth rate,” finance ministry said in a report.
Despite the increase, the report said, the overall external borrowings remained “within manageable limits”.
The report said that India’s external debt to GDP ratio was 17.3 percent at the end of last fiscal and debt service ratio was 4.2 percent.
The annual report released by the Department of Economic Affairs said the country’s external borrowing situation has improved steadily over the last few years. It points out that the external debt to GDP ratio was 38.7 percent in 1991-92 and 22.5 percent in 2000-01, while it has come down to 17.3 percent in 2010-11.
Similarly debt service ratio declined to 4.2 percent in 2010-11 from 30.2 percent in 1991-92 and 16.6 percent in 2000-01.
“The steady improvement in India’s external indebtedness position has been due to prudent external debt management policy followed by the government of India, the main planks of which are monitoring long and short-term debt, raising sovereign loans on concessional terms with longer maturities and regulating external commercial borrowings,” it said.