External debt increased to $111.3 bn

New Delhi, Feb 25 | Updated: Feb 26 2005, 05:55am hrs
Indias outstanding external debt increased from $105.4 billion at the end of March, 2003, to $111.3 billion by March end 2004, attributable to the surge in NRI deposits, according to the 2004-05 Economic Survey.

The survey says that movement in key debt sustainability indicators indicates further consolidation of external debt during 2003-04. As for the total external debt to GDP ratio, it improved to 17.8% at the end of March 2004 from 20.3% at the end of March 2003.

Regarding the proportion of short-term debt in the total external debt, it declined from 4.8% at the end of March 2003 to 4.3% by the end of March 2004. But by September-end of 2004, it increased to 5.7% with a rise in import-related credits, says the survey.

As for debt service payments as a proportion of current receipts, it increased in 2003-04 owing to the exceptional transactions, namely pre-payments and redemptions of RIBs, says the survey. Excluding these one-off transactions, the survey says that the debt service ratio worked out to 4% in 2003-04.

Noting that a prudent external sector policy has been in place since 1991, the survey says that it has placed Indias external debt position at a comfortable level.

In terms of Indias position internationally where external debt is concerned, the survey notes that India ranks eighth among the top 15 debtor countries of the world. The ranking is based on the World Banks global Development Finance 2004 report.