Allaying apprehensions over India’s external debt, the government has said that out of the country’s total external liabilities of $620.7 billion, the Center accounts for just $130.8 billion or 21 per cent of the total debt liability, including its special drawing rights (SDRs). SDR) allocation is also included. According to the report of ET.
The ET report quoted a source as saying, “This rumor is being spread that the central government is burdened with debt, it is baseless. The source said more than 40 per cent of the debt is from non-financial corporations.
According to the latest RBI data, India’s external debt stood at $620.7 billion at the end of March 2022, registering an increase of $47.1 billion from its level at the end of March 2021. External debt-to-GDP ratio declined to 19.9 per cent. Percentage at the end of March 2021 from 21.2 per cent at the end of March 2022.
“Valuation gains were placed at US$ 11.7 billion on account of appreciation of the US dollar against the Indian rupee and major currencies such as the yen, SDR2 and the euro. Excluding the valuation effect, the external debt would have increased by US$ 58.8 billion at the end of March 2021, instead of US$ 47.1 billion at the end of March 2022,” according to the RBI.
According to an ET report, officials clarified the debt position following concerns over India’s external debt as repayment of $267 billion is due in less than a year. This raised fears that the repayment would further deplete India’s foreign exchange reserves and cause more currency depreciation.
The report quoted a source as saying, “This analysis is incomplete, inaccurate and has missed some basic facts.”
While it is true that the $267.7 billion debt is to be repaid in less than a year, the Center’s share is only $7.7 billion, or less than 3 per cent, thus making the government’s debt levels very manageable and secure. . The report quoted officials as saying.
According to the RBI, at the end of March 2022, long-term loans (with an original maturity of above one year) were placed at $499.1 billion, registering an increase of $26.5 billion from its level at the end of March 2021. Is.
The share of short-term debt (with original maturity of up to one year) in total external debt increased to 19.6 per cent at the end of March 2022 from 17.6 per cent at the end of March 2021. Similarly, the proportion of short-term debt (original maturity) in foreign exchange reserves increased to 20.0 per cent at the end of March 2022 (17.5 per cent at the end of March 2021).
US dollar denominated debt remained the largest component of India’s external debt at the end of March 2022, with a share of 53.2 per cent, followed by the Indian rupee (31.2 per cent), SDR (6.6 per cent), yen (5.4 per cent), and euro. (2.9 percent). The outstanding debt of both the government and non-government sectors increased during 2021-22.
Debt servicing (i.e. principal repayment and interest payments) declined to 5.2 per cent of current receivables at the end of March 2021, as compared to 8.2 per cent at end-March 2021, reflecting lower repayment and higher current receivables.
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