India owed over $242.8 billion dollars to other countries at the end of September this year.

The country’s external debt stood at over $242.8 billion at the end of September, up 8 per cent from March end, contributed mostly by overseas borrowings of companies and NRI deposits, according to official data.

India’s total external debt stock that also include export credit, multilateral and bilateral debt, stood at $224.5 billion at the time, up $18.2 billion from March end.

The external commercial borrowings by India Inc at $66.7 million accounted for 27.5 per cent of the country’s total debt, while NRI deposits chipped in 18.9 per cent at $ 45.97 million.

After the global financial crisis hit India hard from the mid-September 2008, India eased its external commercial borrowing norms that had been tightened earlier following abundant capital inflows.

The long term debt of the country increased by 10.6 per cent to $200.4 billion as on September 2009.

Long-term debt at the end of said period accounted for 82.5 per cent of total external debt of India.

In fact, long term debt should constitute most of country’s debt, as large portion of short-term debt had led to major economic crisis in the past.

As such the positive thing here was that India’s short term debt that had increased sharply between March 2005 and March 2008, went down by $ 985 million to $ 42.4 billion at September-end.

The decline was seen in all the components of short-term debt except trade-related credits for the period above six months and up to one year

Short-term credit — a credit of less than 180 days — short-term liabilities of banking system and investment of foreign central banks and other international financial institutions in government’s treasury bills that is considered bad for the economy.

The largest increase of $5.3 billion under the head ’IMF’ was on account of Special Drawing Rights allocations of SDR 3,082.5 million on August 28, 2009 and SDR 214.57 million on September 9, 2009 and the consequent increase in cumulative SDR allocations to SDR 3,978.3 million or $6,303 million at end-September 2009.

NRI deposits and commercial borrowings accounted for an increase of $4.4 billion each, followed by multilateral debt ($2.8 billion), bilateral debt ($1.5 billion) and export credit ($0.8 billion).

The government debt in the total external debt stood at $ 65.7 billion at end-September in 2009, while non- government debt amounted to $177.1 billion.

The share of government debt in total external debt declined from 40.6 per cent at end-March 2004 to 24.9 per cent at end-March 2009, before rising to 27.1 per cent at the time.

Keywords: Indiaexternal debt

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