Despite a substantial 47 per cent improvement in debt-GDP ratio in the last ten-and-a-half years ending 2002, the country's external debt rose to $105 billion as on December 2002 as against $98.8 billion in March, 31, 2002.
According to the quick estimates of India's external debt outstanding, the short-term debt component during the period stood at $3.36 billion as against the long-term debt of $101.63 billion during the period.
According to a status report on India's external debt, despite increase in India's external debt stock in recent years, external debt indicators have progressively witnessed improvement both in debt-GDP and debt-service ratios.
While debt-GDP ratio declined from 38.7 per cent as on end-March, 1992 to 20.6 per cent at end-December 2002, the debt service as a per cent of current receipts declined from 30.2 per cent to 13.7 per cent during the period.
The report said some other crucial indicators such as short-term to total debt ratio, short-term debt to forex assets ratio have also improved substantially over the time.
It said though the external debt remained relatively stable around $93.5 billion during two years ending March 31, 1998, it has increased marginally in recent years.
In the backdrop of global recession in 2001, the World Bank observed that besides financial imbalances that had built up during the expansion of 1990s, there were also wide incidences of debt difficulties, both across developed and developing countries, the report said.
It said nations that have adjusted in order to live with less debt and opened themselves to the flow of FDI funding have been relatively strong performers in recent years.
On India, it said owing to progressive liberal policy adopted by the government in the post reforms period in 1990s, FDI inflows and portfolio investments have steadily expanded from $133 million in 1991-92 to $5.93 billion in 2001-02.
Besides, substantial increase in forex assets by $64.8 billion between March 31, 1991 and December 2002 as against the increase in external debt by $21.2 billion during the period under review, implies that most of the foreign currency assets have accumulated through non-debt creating flows, the report said.