GST Plus - Get Daily updates,support,whatsapp Group & reply to GST Notices etc.!! Call : 011-411-70713 !!

ICICI

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

India�s External Debt as at the end of March 2011

As per the standard practice, India's external debt statistics for the quarters ending March and June are released by the Reserve Bank of India and those for the quarters ending September and December by the Ministry of Finance, Government of India. The external debt data are released with a lag of one quarter. The external debt data, as compiled in the standard format, as at end-March 2011 in Rupees and US dollar terms and revised data for the earlier quarters are set out inStatement 1and2. The major developments relating to India�s external debt as at end-March 2011 are presented in the following paragraphs.

Major Highlights

i.India�s external debt, as at end-March 2011, was placed at US $ 305.9 billion (17.3 per cent of GDP) recording an increase of US $ 44.9 billion or 17.2 per cent over the end-March 2010 level on account of significant increase incommercial borrowings, short-term trade credits, bilateral and multilateral borrowings.

ii.Excluding the valuation effects due to depreciation of US dollar against other major international currencies and Indian Rupee, the stock of external debt has increased by US$ 38.4 billion over the stock as at end-March 2010.

iii.The share of commercial borrowings stood highest at 28.9 per cent as at end-March 2011 followed by short-term debt (21.2 per cent), NRI deposits (16.9 per cent) and multilateral debt (15.8 per cent).

iv.The debt service ratio declined to 4.2 per cent during 2010-11 as compared to 5.5 per cent during 2009-10.

v.Based on residual maturity, short-term debt accounted for 42.2 per cent of the total external debt as at end-March 2011. Whereas the share of short-term debt, by original maturity, was 21.2 per cent of the total external debt stock.

vi.The ratio of short-term debt to foreign exchange reserves at 21.3 per cent as at end- March 2011 was higher compared to 18.8 per cent as at end-March 2010.

vii.The US dollar accounted for 59.9 per cent of the total external debt stock as at end-March 2011 followed by Indian rupee (13.2 per cent) and Japanese Yen (11.4 per cent).

viii.India�s foreign exchange reserves provided a cover of 99.6 per cent to the external debt stock at the end of March 2011 as compared with 106.9 per cent as at end-March 2010.

1. India�s External Debt as at end-March 2011

i.India�s external debt, as at end-March 2011, was placed at US$ 305.9 billion (17.3 per cent of GDP) recording an increase of US$ 44.9 billion or 17.2 per cent over the end-March 2010 level on account of significant increase in commercial borrowings, short-term trade credits, bilateral and multilateral borrowings.

ii.The long-term debt at US$ 240.9 billion and short-term debt at US$ 65.0 billion accounted for 78.8 per cent and 21.2 per cent, respectively, of the total external debt as at end-March 2011.

iii.The share of commercial borrowings continued to be highest at 28.9 per cent in the total external debt as at end-March 2011 followed by short-term debt (21.2 per cent), NRI deposits (16.9 per cent) and multilateral debt (15.8 per cent) (Table 1).

Table 1: External Debt by Component

(US $ million)

Item

End- March

1991

1998

2005

2006

2007

2008

2009

2010 PR

2011 P

1

2

3

4

5

6

7

8

9

10

1. Multilateral

20,900

29,553

31,744

32,620

35,337

39,490

39,538

42,859

48,464

(24.9)

(31.6)

(23.7)

(23.4)

(20.5)

(17.6)

(17.6)

(16.4)

(15.8)

2. Bilateral

14,168

16,969

17,034

15,761

16,065

19,708

20,613

22,593

25,953

(16.9)

(18.1)

(12.7)

(11.3)

(9.3)

(8.8)

(9.2)

(8.7)

(8.5)

3. IMF

2,623

664

1,029

981

1,029

1,120

1,018

6,041

6,308

(3.1)

(0.7)

(0.8)

(0.7)

(0.6)

(0.5)

(0.5)

(2.3)

(2.1)

4. Trade Credit

4,301

6,526

5,022

5,420

7,165

10,328

14,490

16,867

18,627

(5.1)

(7.0)

(3.7)

(3.9)

(4.2)

(4.6)

(6.5)

(6.5)

(6.1)

5. ECBs

10,209

16,986

26,405

26,452

41,443

62,334

62,413

70,800

88,267

(12.2)

(18.2)

(19.7)

(19.0)

(24.0)

(27.8)

(27.8)

(27.1)

(28.9)

6. NRI Deposits

10,209

11,913

32,743

36,282

41,240

43,672

41,554

47,890

51,682

(12.2)

(12.7)

(24.4)

(26.1)

(23.9)

(19.5)

(18.5)

(18.3)

(16.9)

7. Rupee Debt

12,847

5,874

2,302

2,059

1,951

2,017

1,527

1,657

1,601

(15.3)

(6.3)

(1.7)

(1.5)

(1.1)

(0.9)

(0.7)

(0.6)

(0.5)

8. Long-term Debt (1to 7)

75,257

88,485

1,16,279

1,19,575

1,44,230

1,78,669

1,81,153

2,08,707

2,40,902

(89.8)

(94.6)

(86.8)

(86.0)

(83.7)

(79.6)

(80.7)

(80.0)

(78.8)

9. Short-term Debt

8,544

5,046

17,723

19,539

28,130

45,738

43,362

52,329

64,990

(10.2)

(5.4)

(13.2)

(14.0)

(16.3)

(20.4)

(19.3)

(20.0)

(21.2)

Total (8+9)

83,801

93,531

1,34,002

1,39,114

1,72,360

2,24,407

2,24,515

2,61,036

3,05,892

(100)

(100)

(100)

(100)

(100)

(100)

(100)

(100)

(100)

P: Provisional. PR: Partially Revised.

IMF: International Monetary Fund; ECBs: External Commercial Borrowings; NRI: Non-Resident Indian

Note: Figures in parentheses are percentage to total external debt.

Source: Ministry of Finance, Government of India and Reserve Bank of India.

2. Valuation Changes

i.The valuation effect reflecting the depreciation of the US dollar against other major international currencies and Indian rupee resulted in an increase in India�s external debt by US$ 6.5 billion during 2010-11. This implies that excluding the valuation effects, the stock of external debt as at end-March 2011 would have increased by US$ 38.4 billion over the level at end-March 2010.

ii.Compared with the previous quarter (end-December 2010), the valuation effect reflecting the depreciation of the US dollar against other major international currencies and Indian rupee resulted in an increase of US$ 1.3 billion in India�s external debt. This implies that excluding the valuation effects, the stock of external debt as at end-March 2011would have increased by US$ 8.7 billion over the level at end-December 2010.

3. Components of External Debt

i.The loans under external assistance (multilateral and bilateral debt) increased by around US $ 9.0 billion during 2010-11 as compared with a lower increase of US$ 5.3 billion during the previous year (Table 2).

ii.Trade credits (both long-term and short-term) increased, by US $ 12.8 billion, as at end-March 2011 compared to US$ 9.9 billion over the level at end-March 2010.

iii.The commercial borrowings increased by US$ 17.5 billion as at end-March 2011 over its level as at end-March 2010 as compared to an increase ofUS $ 8.4 billionduring the corresponding period of the preceding year.

iv.The short-term debt increased by US$ 12.7 billion to around US$ 65.0 billion as at end-March 2011 as compared to US$ 52.3 billion as at end-March 2010 primarily on account of rise in short-term trade credits.

v.The NRI deposits increased by US$ 3.8 billion to US $ 51.7 billion as at end-March 2011 over the level as at end-March 2010 largely on account of increase in NRO deposits and FCNR(B) deposits and partly due to valuation effects.

Table 2: External Debt - Outstanding and Variation

(US$ million)

Memo Items

Outstanding at the end-of

Absolute variation

Percentage variation

09-Mar

� Mar-10 PR

Mar- 2011 P

Mar-09 to Mar-10

Mar-10 to Mar-11

Mar-09 to Mar-10

Mar-10 to Mar-11

1

2

3

4

5

6

7

8

1. Multilateral

39,538

42,859

48,464

3,321

5,605

8.4

13.1

2. Bilateral

20,613

22,593

25,953

1,980

3,360

9.6

14.9

3. IMF

1,018

6,041

6,308

5,023

267

493.4

4.4

4. Export Credit

14,490

16,867

18,627

2,377

1,760

16.4

10.4

5.Commercial Borrowings

62,413

70,800

88,267

8,387

17,467

13.4

24.7

6. NRI Deposits

41,554

47,890

51,682

6,336

3,792

15.2

7.9

7. Rupee Debt

1,527

1,657

1,601

130

-56

8.5

-3.4

8. Short term Debt

43,362

52,329

64,990

8,967

12,661

20.7

24.2

Of which

Short term trade credit

39,964

47,473

58,462

7,509

10,989

18.8

23.1

Total Debt

2,24,515

2,61,036

3,05,892

36,521

44,856

16.3

17.2

Memo Items

A. Long-Term Debt

1,81,153

2,08,707

2,40,902

27,554

32,195

15.2

15.4

B. Short-Term Debt

43,362

52,329

64,990

8,967

12,661

20.7

24.2

P: Provisional. PR: Partially Revised.

Source: Ministry of Finance, Government of India and Reserve Bank of India

4. Currency Composition of India�s External Debt

i.The currency composition of India�s external debt consists of major international currencies such as US Dollar, Japanese Yen, Euro, Pound Sterling, Special Drawing Rights (SDR) and the domestic currency i.e., Indian Rupee.

ii.The US Dollar denominated debt continues to be the largest with a share of 59.9 per cent in the total external debt as at end-March 2011.The share of Indian rupee in the total external debt stock accounted for 13.2 per cent as at end-March 2011 followed by Japanese Yen (11.4 per cent), and SDR (9.7 per cent). The share of Euro accounted for 3.7 per cent as at end-March 2011.

5. External Debtby Residual Maturity

i.Based on residual maturity, the short-term debt accounted for 42.2 per cent of total external debt as at end-March 2011. The ratio of short-term debt by residual maturity to foreign exchange reserves worked out to 42.3 per cent at end-March 2011 (Table 3).

Table 3: Residual Maturity of External Debt Outstanding as at End-March 2011

(US $ million)

Components

Short-term up to one year

Long-term

Total

1 to 2 years

2 to 3 years

More than 3 years

(2) to (5)

1

2

3

4

5

6

1. Sovereign Debt (long-term)

4,769

5,156

5,339

60,058

75,322

2.� External Commercial Borrowings��(including trade credit)

18,791

18,777

15,175

61,155

1,13,898

3.� NRI deposits {(i)+(ii)+(iii)}

40,513

7,046

2,491

1,632

51,682

(i)� FCNR(B)

11,979

2,230

858

530

15,597

(ii) NR(E)RA

21,419

3,350

1,002

607

26,378

(iii) NRO

7,115

1466

631

495

9,707

4.� Short-term Debt* (Original maturity)

64,990

-

-

-

64,990

Total (1 to 4)

1,29,062

30,979

23,006

1,22,845

3,05,892

Memo Items

Short-term debt (Residual maturity as per cent of total external debt )

42.2

Short-term debt (Residual maturity as per cent of Reserves)

42.3

* Also includes short-term component of sovereign debt amounting to US$ 2,842 million.

Note: Residual Maturity of NRI Deposits is estimated on the basis of the Survey conducted by the Reserve�Bank of India on NRI deposits outstanding as on March 31, 2011.

Source: Ministry of Finance, Government of India and Reserve Bank of India.

6. Government and Non-Government External Debt

i.Government (Sovereign) external debt stood at US$ 78.2 billion as at end-March 2011as against US$ 67.1 billion as at end-March 2010. The share of Government external debt in the total external debt at 25.6 per cent at end-March 2011 almost remained stable as that of 25.7 per cent as at end-March 2010.

ii.The share of non-Government debt in total external debt at 74.4 per cent as at end-March 2011 also remained stable as that of 74.3 per cent at end-March 2010. The share of non-Government debt in total external debt, however, has increased steadily over the years (Table 4).

Table 4: Government and Non-Government External Debt

(US $ million)

Sr. No.

Components

End-March�

2005

2006

2007

2008

2009

2010

2011

1

2

3

4

5

6

7

8

9

A.

Sovereign Debt (I+II)

47,697

46,259

49,360

58,068

55,874

67,080

78,165

(As a percentage of GDP)

6.3

5.5

5.0

4.6

5.1

4.7

4.4

I.

External Debt on Government Account under External Assistance

43,686

43,510

46,155

52,538

51,816

55,235

62,388

II.

Other Government External Debt @

4,011

2,749

3,205

5,530

4,058

11,845

15,777

B.

Non-Government Debt #

86,305

92,855

1,23,000

1,66,339

1,68,641

1,93,955

2,27,726

(As a percentage of GDP)

11.8

11.3

12.5

13.4

15.4

13.4

12.9

C.

Total External Debt (A+B)

1,34,002

1,39,114

1,72,360

2,24,407

2,24,515

261036

3,05,892

(As a percentage of GDP)

18.1

16.8

17.5

18.0

20.5

18.0

17.3

�@: Other Government external debt includes Defence Debt, Investment in Treasury Bills/ Government Securities by FIIs, Foreign Central Banks and International Institutions and IMF.

#: Includes external debt of Monetary Authority.

Source: Ministry of Finance, Government of India and Reserve Bank of India

7. Select Indicators of External Debt

i.While the debt to GDP ratio and debt service ratio improved, other indicators like ratio of foreign exchange reserves to total debt and the short-term debt as per cent to total debt as well as foreign exchange reserves deteriorated as at end-March 2011as compared to end-March 2010 (Table 5).

Table 5: India�s Key External Debt Indicators

Year

External Debt

Ratio of External Debt to GDP

Debt Service Ratio

Ratio of Foreign Exchange Reserves to Total Debt

Ratio of Concessional Debt to Total Debt

Ratio of Short-Term Debt to Foreign Exchange Reserves

Ratio of Short- Term Debt to Total Debt

(US $ billion)

(per cent)

(per cent)

(per cent)

(per cent)

(per cent)

(per cent)

1

2

3

4

5

6

7

8

1990-91

83.8

28.7

35.3

7

45.9

146.5

10.2

1995-96

93.7

27

26.2

23.1

44.7

23.2

5.4

2000-01

101.3

22.5

16.6

41.7

35.4

8.6

3.6

2001-02

98.8

21.1

13.7

54.7

35.9

5.1

2.8

2002-03

104.9

20.3

16.0*

72.5

36.8

6.1

4.5

2003-04

111.6

18

16.1**

101.2

35.8

3.9

4

2004-05

133

18.1

5.9^

106.4

30.7

12.5

13.3

2005-06

138.1

16.8

10.1#

109.8

28.4

12.9

14.1

2006-07

172.4

17.5

4.7

115.6

23

14.1

16.3

2007-08

224.4

18.0

4.8

138

19.7

14.8

20.4

2008-09

224.5

20.5

4.4

112.2

18.7

17.2

19.3

2009-10PR

261.0

18.0

5.5

106.9

16.8

18.8

20.0

2010-11P

305.9

17.3

4.2

99.6

15.6

21.3

21.2

P: Provisional. PR: Partially Revised.

*� Works out to 12.4 per cent, with the exclusion of pre payment of external debt of US $ 3,430 million.

** Works out to 8.2 per cent with the exclusion of pre payment of external debt of US $ 3,797 million and redemption of Resurgent India Bonds (RIBs) of US $ 5,549 million.

^ works out to 5.7 per cent with the exclusion of pre payment of external debt of US $ 381 million.

# works out to 6.3 per cent with the exclusion of India Millennium Deposits (IMDs) repayments of US $ 7.1 billion and pre payment of external debt of US $ 23.5 million.

Source: Ministry of Finance, Government of India and Reserve Bank of India



Comments


img

Trending Tags