External Debt Rises to $426 bn in December

Amid growing economic concerns, the Finance Ministry on Friday said that the country’s external debt rose to $426 billion at the end of December 2013.

External debt increased by $21.1 billion over the March 2013 level. However, sovereign external debt came down from $81.7 billion (March 31 2013) to $76.4 billion at the end of December. “The Government’s (Sovereign) external debt stood at $76.4 billion, (17.9% of total external debt) at end-December 2013 as against $81.7 billion (20.2%) at end-March 2013,” the Finance Ministry said.

Long term debt increased 8.1 per cent to $333 billion while short term debt declined 4.1 per cent, the ministry reportedly said.

“The rise in external debt during the period was due to long-term debt particularly NRI deposits. A sharp increase in NRI deposits reflected the impact of fresh FCNR(B) deposits mobilised under the swap scheme during September-November 2013,” the finance ministry said in its quarterly report.

External debt ratio to GDP ratio stood at 23.3 per cent when compared to 21.8 per cent at the end of the previous financial year (March 31 2013) while debt service ratio was at 5.9 per cent in 2012-13.

“The share of US dollar denominated debt was the highest in external debt stock and stood at 63.6 per cent at end- December 2013, followed by debt denominated in Indian rupee (19.4 per cent), SDR (7.1 per cent), Japanese yen (5.0 per cent) and Euro (3.1 per cent),” the report added.

Govt to borrow Rs 3.68 lakh cr in H1 of FY15

Meanwhile, the government said that they would borrow Rs 3.68 lakh crore in the first half of the upcoming fiscal. The borrowing accounts for 61.5% of the total budget target for Fy15.

According to sources, the gross market borrowing through issue of dated securities in FY15 has been estimated to be Rs 5.97 lakh crore, Rs 34,000 crore higher than the previous fiscal (Fy13). During Fy13, the government borrowed a total of Rs 5.63 lakh crore with over 60 per cent borrowing activity taking place in the first two quarters (April-September). It was reported that this would leave more scope for private sector to tap the market in the second half of Fy15.

“This (market borrowing plan) is in line with fiscal correction by the government. We are confident that the borrowing programme will be conducted smoothly,” Arvind Mayaram, Secretary of the Department of Economic Affairs told reporters here.