Economic Survey: India’s external debt not unsustainable

New Delhi, July 4 (IANS) The key external debt indicators reflect that India's external debt is not unsustainable, the Economic Survey 2018-19 said.

According to the survey, India's external debt was $521.1 billion at end-December 2018, which was 1.6 per cent lower than its level at end-March 2018.

"The long-term debt declined by 2.4 per cent to $417.3 billion at end-December 2018 over end-March 2018, though its share was mostly same at 80.1 per cent compared to 80.7 per cent during the same period," said the survey, which was tabled in the Parliament by Finance and Corporate Affairs Minister Nirmala Sitharaman on Thursday.

"This constancy of share has been in evidence since 2014. Short-term debt grew by 1.7 per cent in end-December 2018 compared to end-March 2018, primarily due to increase in trade related credits," it said.

As per the survey, international comparison of external debt based on World Bank data shows that among the top 20 developing debtor countries in 2017, India's external debt to Gross National Income (GNI) ratio at 19.8 per cent was the fourth lowest.

In terms of the foreign exchange reserves cover to external debt, India's position is fifth highest at 75.9 per cent, whereas India has fifth lowest short-term debt to foreign exchange reserves at 25.1 per cent among the top 20 developing debtor countries.

Besides, the survey also pointed out that India's foreign exchange reserves continue to be comfortably placed in excess of $400 billion.

"Among the major economies running current account deficit, India is the largest foreign exchange reserve holder and eighth largest among all the countries of the world," the survey added.