External debt up 12.8% in first half of fiscal 2010-11

 External debt stood at 262.3 billion at the end of fiscal 2009-10 and increased by 33.5 billion dollars during the April-September period of current fiscal 2010-11, data released by the Finance Ministry show.

Analysis of data shows rupee appreciation led to rise in external debt by  $6.3 billion posting a massive 188 per cent of the total increase, during the period.

The long-term debt rose by 9.5 per cent to $229.8 billion, while short-term debt increased by 25.8 per cent to $66 billion during the first half. Amongst the components of long-term debt, which accounted for nearly 80 per cent of the total debt, the share of commercial borrowings stood at 27.8 per cent.

“The increase in India’s external debt at end-September 2010 over end-March 2010 level was mainly on account of higher commercial borrowings and short-term debt,” the Finance Ministry said.

The surge in India Inc’s commercial borrowing was primarily due to surge in demand for dollar to meet the import requirements following revival in the economy.

The share of government debt in total external debt stood at $72.3 billion (24.4 per cent of total debt) as against $67.1 billion at the end of March.

The break up of the external debt shows the share of US dollar in the external debt portfolio was at 53.9 per cent at end-September. While the share of NRI deposits was at 16.9 per cent, multilateral debt accounted for 15.8 per cent of the total debt at the end of September.

The share of US dollar denominated debt was the highest in external debt stock at 53.9 per cent at end-September 2010 followed by the Indian Rupee (18.8 per cent), the Finance Ministry said.