External debt up at $112 bn

India's external debt rose over six per cent to $112.1 bilion mainly because ofa surge in non-resident Indian deposits till December 2003.

Alhough the tenth status report released today claimed that external debt indicators had "improved" in recent years, it said the cost of servicing the debt had increased owing to redemptions of Resurgent India Bonds.

The tenth status report analyses India's external debt situation covering the data from March 1991 to December 2003.

The country's external debt stood at $105.3 billion till December 31, 2002, showing a rise of $6.8 billion in one year, the report said.

Highlighting "improvements" in external debt indicators, it said foreign debt to gross domestic product ratio had declined to 20.2 per cent in 2002-03 from 28.7 per cent during 1990-91.

The fall in extrenal debt-GDP ratio is attributed to shift in policy towards non-debt creating flows as foreign direct investment and portfolio investment.

Although debt service ratio declined from as high as 35.3 per cent in 1990-91 to 15.8 per cent in 2002-03, it rose to 18.1 per cent during the first nine months of 2003-04 because redemption of ribs.

"If redemption of ribs are excluded, the debt service ratio works out to 11.1 per cent," the report said.

Quoting World Banks' global development finance data, the report said India improved its ranking among the top 1 debtor countries of the world by moving down to eighth slot from the earlier third position.

The bank had upgraded India from 'modertately indebted' to 'less indebted' country in 1999, it said.