External debt rises USD 40 bn in 2011-12

At the end of March 2011,the external debt,which indicates liability of residents of a country to non-residents,was USD 305.9 billion.

8220;The rise could be attributed mainly to increase in commercial borrowings,short-term debt,and non-resident Indian deposits,8221; the statement added.

At the end of March,the share of commercial borrowings in total external debt stock stood at 30.2 per cent,followed by short-term debt 22.6 per cent,NRI deposits 16.9 per cent and multilateral debt 14.6 per cent.

8220;Though the rising shares of components namely ECB are in line with the broad policy orientation of the Indian economy that has emphasised attracting foreign savings into the economy over the past few decades,these developments signal heightened exposure of the domestic corporate sector to external shocks,including adverse exchange rate movements,8221; the statement said.

At end-March 2012,India8217;s short-term external debt stood at USD 78.1 billion,reflecting an increase of 20.3 per cent over end-March 2011,as the share of FII investment increased.

Trade credits accounted for 83.3 per cent of short-term debt at end-March 2012 as against 90 per cent as at end-March 2011.

India8217;s external debt has remained within manageable limits as indicated by the external debt to GDP ratio of 20 per cent and the debt service ratio of 6 per cent in 2011-12,the statement said.

8220;A cross country comparison also shows that India continues to be among the less vulnerable countries with its external debt indicators comparing well with other indebted countries,8221; it added.