1. India’s External Debt Jumps 12.9% to $390 b
The country’s external debt rose 12.9% in FY13 to $390 billion on account of a sharp
rise in short-term trade credit.
There has been sizeable rise in external commercial borrowings (ECBs), short-term
debt and NRI deposits as well, data released by the Reserve Bank of India said.
In terms of major components, the share of external commercial borrowings
continued to be the highest at 31.0% of total external debt, followed by short-term
debt (24.8%) and NRI deposits (18.2%).
The ratio of short term debt, which was seen declining in the late ’90s, has started
rising sharply since the global financial meltdown of 2008. The share of short-term
debt in total debt, by original maturity, was 24.8% as of end March. “The rising
proportion of short-term debt is clearing disconcerting. More so because much of the
increase is concentrated in a few sectors.” said Jahangir Aziz chief Asia economist, JP
Morgan.