External debt crosses $100b mark

By Our Special Correspondent

NEW DELHI, NOV. 6. India's external debt crossed the $100 billion mark in March this year, a rise of 2.35 per cent over $98.3 billion debt in 1999-2000. The increase in the external debt has been mainly on account of the $5.5 billion India Millennium Deposits floated by State Bank of India.

Of the $100.4 billion external debt, long term debts accounted for almost 97 per cent at $96.9 billion, while the remaining $3.5 billion came in through the short term route.

According to an official note, despite the increase in overall debt by $2.1 billion, there was some improvement in key external debt indicators during 2000-01 which made external debt more manageable. The debt service ratio declined from a peak of 35.3 per cent of current receipts in 1990-91 to 16.3 per cent in 2000- 01, which means that now only one-sixth of the current receipts were needed to service the debt whereas it required more than one-third in 1990-91.

Similarly, the debt to gross domestic product (GDP) ratio, which shows the magnitude of external debt in relation to domestic output, declined from a high of 38.7 per cent in 1991-92 to 21.5 per cent in 2000-01. The ratio of short term debt to total external debt also declined gradually from a high of 10.2 per cent at the end of March 1991 to 3.4 per cent at the end of March 2001.

In terms of largest debtor country in absolute terms in 1999, India fell to tenth position from third in 1991, which is an improvement.

The official note also pointed out that the level of external debt had been relatively stable in the last decade, debt portfolio was characterised by low share of short term debt and sustained improvement in the key indicators showing considerable improvement in external indebtedness of the country. The share of Government debt declined to 44.4 per cent at the end of March 2001 as against a high level of 60.7 per cent in 1993.

Although the share of concessional debt fell from 45.3 per cent in March 1995 to 35.9 per cent in March 2001, the official position is that India's share of concessional debt in total external debt is relatively high compared to other developing countries.

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