India's external debt rises by 0.8 pc

India's external debt rises by 0.8 pc
ENS ECONOMIC BUREAU

MUMBAI, AUG 28: India's external debt problems are mounting with liabilities set to cross the $ 100 billion mark. The external debt of the country has increased by 0.8 per cent from $ 97.666 billion as of March 1999 to $ 98.435 billion by March 2000, the Reserve Bank of India has said.

Component-wise, long-term non-resident deposits, multilateral (excepting International Monetary Fund) and bilateral debt increased while debt owed to the IMF, external commercial borrowings and rupee debt owed to the erstwhile USSR fell in absolute terms. ``The proportion of multilateral (excepting IMF) and bilateral debt in the total debt inched up from 49.2 per cent as at March end 1999, to 50.2 per cent as at end March 2000,'' RBI said in its annual report.

The debt under long-term non-resident deposits increased from 12.6 per cent to 14.8 per cent, RBI said. The share of commercial borrowings (including long-term trade credits) fell from 28.6 per cent to 26.4 per cent and that of rupee debt fell from 4.8 per cent to 4.5 per cent over the same period, it added.

The marginal increase in outstanding debt notwithstanding, the process of consolidation of external debt continued to be strengthened. The external debt-GDP ratio declined from 23.5 per cent (March end 1999), to 22 per cent as at March end 2000, while the ratio of debt to current receipts fell from 163.4 per cent to 144.3 per cent, the apex bank said.

The proportion of short-term debt to total debt declined from 4.5 per cent as at end March 1999 to 4.1 per cent as at March end 2000, RBI said. The decline was on account of short-term non-resident Indians deposits which fell from $ 2,199 million (March 1999) to $ 1,479 million (March 2000), reflecting the effect of the policy of raising the minimum maturity of FCNR (B) deposits to one year, it added.

The element of concessional debt still continues to be significant, rising as a proportion to total debt from 38.2 per cent (March-end 1999) to 38.5 per cent (March-end 2000).

The RBI has said the major focus of external debt management has been to attract external resources in the form of non-debt creating flows, especially direct investment inflows while de-emphasising short-term debt and volatile flows.

The shift in emphasis from debt to non-debt flows has underscored the importance of monitoring the stock of total liabilities (debt as well as non-debt) as also the total servicing of liability as opposed to the traditional emphasis on servicing of debt liabilities, it said. Even with this criterion, a downward trend in servicing of liability was seen with the liability service ratio falling from 19.1 per cent in 1998-99 to 16.8 per cent in 1999-2000, it added.

Govt borrowings exceed target by 27 pc

MUMBAI: The Reserve Bank of India has said the net market borrowings of the central government at Rs 73,077 crore during 1999-2000 exceeded the budgeted target by 27 per cent. At this level, the gross market borrowing, as per Reserve Bank records, amounted to Rs 99,630 crore as against Rs 93,953 crore during 1998-99.

Of the total gross borrowings, mobilisation through dated securities amounted to Rs 86,630 crore, while short-term borrowings (364-day treasury bills) amounted to Rs. 13,000 crore, Reserve Bank of India said in its annual report for the year 1999-2000 here today.

During 1999-2000, RBI's initial support to the central government borrowing programme by way of private placement/ devolvement of dated securities and devolvement of 364-day treasury bills amounted to Rs 29,267 crore (29.4 per cent of the primary issues) as against Rs 39,777 crore (42.3 per cent) during 1998-99.

The initial subscription from RBI, however, was relatively low during 1999-2000 due to the strong increase in the demand for government securities by banks, financial institutions and mutual funds, it said.