External debt up 4.8% on NRI deposits

The country's external debt has increased by 4.8 per cent or $ 5 billion to $109.6 billion as on June end 2003 from $ 104.6 billion as at end-March 2003 mainly on account of an increase in non-resident deposits by $2.6 billion, Reserve Bank of India said.

The short-term debt increased significantly from $ 4.6 billion as at March end 2003 to $5.8 billion as at June end 2003 due to increase in both components of short-term debt""NRI deposits and short-term trade credit, the Reserve Bank of India said in a release today.

The concessional debt as a proportion of total debt declined from 36.9 per cent as at end-March 2003 to 35.5 per cent at end-June 2003.

The other major components of the external debt in the first quarter ended June 2003 were external commercial borrowings at $1.1 billion and short term trade credit of $0.9 billion.

According to the RBI, the increase in NRI deposits by $2.6 billion was mainly on account of an increase in NRE deposits by $ 2.7 billion as there was an outflow of $ 0.1 billion in FCNR(B) deposits.

The increase in NRE deposits includes reinvestment of maturity proceeds of NR(NR)RD scheme (which was discontinued with effect from April 1, 2002), of around $ 0.4 billion.

The increase in ECB reflected a rise in borrowing by corporates in the face of low international interest rates.

Trade credit increase has been the result of sharp increase in India's imports.

The RBI said that multilateral debt which accounted for 27.6 per cent was the largest component of the overall external debt as at end-June 2003.

This was followed by NRI deposits (25.3 per cent), external commercial borrowings (21.4 per cent), and bilateral debt (15.5 per cent).

The RBI added that despite a considerable growth in short-term debt of 27.7 per cent during April-June 2003, the proportion of such debt in the overall debt stock remains at 5.3 per cent.