If government debt is valued as realistically as it likes others to do so, its report card in this regard would get much more alarming.
According to a finance ministry assessment, the Centre’s total outstanding external debt at the end of March was estimated at Rs 1,39,581 crore, or 2.2 per cent of the gross domestic product (GDP). If the assessment was done at the then exchange rate, which was Rs 45.11 a dollar on March 31, the amount outstanding rose by 78.6 per cent, to Rs 2,49,304 crore.
In the roadmap for reducing the level of government debt, the finance ministry has itself said external debt reporting needs to be at current exchange rates, rather than at book value with the historic exchange rate.
According to the finance ministry document, external debt constituted 8.4 per cent of overall central government debt and 5.5 per cent of overall general government debt, low in official opinion.
| SPOT THE DIFFERENCE CENTRE'S EXTERNAL DEBT | |||||||
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | 2008-09 | 2009-10 | 2010-11 | |
| At book value (Rs cr) | 60877 | 94243 | 102716 | 112031 | 123046 | 139581 | 162045 |
| % of GDP | 1.9 | 2.5 | 2.4 | 2.3 | 2.2 | 2.2 | 2.3 |
| At current value (Rs cr) | 191144 | 194070 | 201199 | 210086 | 264062 | 249304 | 271768 |
| % of GDP | 5.9 | 5.2 | 4.7 | 4.2 | 4.7 | 4.0 | 3.9 |
| Data for 2004-05 to 2008-09 are estimates, while those for 2009-10 and 2010-11 are based on official estimates Budget Estimate for ‘10-11 is arrived at by adding ‘09-10 provisional with net external debt estimated in Budget Estimate for ‘10-11 Exchange rate: Rs 45.11 per US dollar Source: Ministry of Finance | |||||||
Besides, most of the external debt is from multilateral agencies (68.5 per cent) and a small proportion of existing external debt comes from bilateral agencies. These loans are generally long-term variable rate loans, linked to the London Inter-Bank Offer Rate
External debt (at the current exchange rate) as a percentage of GDP has largely shown a declining trend in recent years.
