India’s external debt increased by 6.6% in last fiscal
India’s external debt has gone up to $475.8 billion during the last financial year, an increase of 6.6% (29.5 billion) over $446.3 billion since the previous year. The rise was a result of increased commercial borrowings and NRI deposits. According to the Status Report 2014-15 on external debt released by the Ministry of Finance, India’s long-term borrowing from overseas grew at 10.3% to $391.1 billion during 2014-15. The long-term external debt contributed 82.2% of the total foreign debt in FY2015, compared to 79.5% in FY2014. “India’s external debt has remained within manageable limits as indicated by the external debt-GDP ratio of 23.8% during 2014-15. External debt of the country continues to be dominated by the long-term borrowings,” said the report. At the same time, the country’s short-term foreign borrowing showed a decline of 7.6% in the last fiscal and reduced to $84.7 billion from $91.7 billion a year ago. The decline in short-term loan was a result of decrease in FII (foreign institutional investors) investment in the government treasury bills. This led to a reduction in the share of short-term credit in the country’s total external debt to 17.8% from 20.5% over the last fiscal year. The share of government (sovereign) external debt accounted for $89.7 billion during 2014-15, up from $83.7 billion recorded during 2013-14. This indicates that the government borrowing contributed 18.9% in India’s total external debt during FY15. The share was 18.8% during the previous fiscal. Citing the International Debt Statistics 2015, the World Bank said that India continued to be a less vulnerable country as compared to other indebted developing countries in terms of their external debts.
August 29, 2015 | 2:37pm IST.
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