The Hindu Business Line : External debt rises marginally to $113.6 b — Short-term debt up by 3.9 pc to $6.485 b in September quarter

THE country's total external debt registered a marginal increase to $113.6 billion as at the end of September 2004 from a level of $113.2 billion at end-June 2004.

While the long-term debt outstanding showed no significant change over the quarter and stood at $107.10 billion at end-September 2004, the short-term debt, however, increased by 3.9 per cent over the quarter to $6.485 billion at end-September 2004.

Short-term debt at the end of March 2004 stood at $4.770 billion. This had moved up to $6.242 billion as at end-June 2004. According to the external debt statistics for the quarter end-September 2004 released by the Finance Ministry here on Friday, the short-term debt has seen an increase on account of the rise in trade credits.

Increase in trade credits is being attributed to larger import growth during the current fiscal year so far. The other component of the short-term debt — NRI deposits had been "nil" since the quarter ended June 2004 as deposits with maturity up to one year under Non Resident (External) Rupee Account, which was the only remaining category under short-term, was withdrawn effective April 2003.

The long-term debt has remained in the narrow range of $106.2 billion to $107.1 billion since end-September 2003. Within the group of long-term debt, while multilateral debt rose by $253 million to $30.135 billion due to higher net utilisation of World Bank loans, bilateral debt declined by $353 million over the quarter to $16.603 billion.

Export credit outstanding at $ 4.491 billion was a shade higher and outstandings under the commercial borrowings at $22.966 billion were larger by $380 million as compared to those at the end of preceding quarter due to increased access to international capital market by Indian corporates.

The other two components of the long-term debt - NRI deposits and rupee debt, declined to $173 million to $30.612 billion and $11 million to $2,298 million respectively.

NRI deposits, which had risen significantly during 2002-03 and 2003-04, contracted during the first two quarters of the current fiscal year reflecting rationalisation of interest rates on such deposits.

In terms of their share in total debt stock, multilateral debt constituted 26.5 per cent of the total debt at end September 2004. Non-resident deposits accounted for 26.9 per cent, followed by commercial borrowings at 20.2 per cent. While the share of bilateral debt stood at 14.6 per cent, export credit and rupee debt accounted for 4 and 2 per cent respectively. The share of short-term debt was 5.7 per cent.

The composition of Government and non-government debt showed a steady decline in government debt from $59.502 billion (60.1 per cent of the total external debt) at end-March 1995 to $44.130 billion (38.9 per cent) at end-September 2004 and a corresponding increase in non-government debt from $39.506 billion (39.9 per cent of the total debt) to $69.460 billion (61.1 per cent) during this period.

The country's foreign currency reserves including foreign currency assets of the RBI, gold, Special Drawing Rights and reserve tranche position in the International Monetary Fund amounted to $119.6 billion as at the end of September 2004.

Foreign currency assets of the RBI were of the order of $114.10 billion as on September 30, 2004.

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