Indias external debt declined to $92.20 billion at end-March 1996 from $99.01 billion in March 1995. However, more than three-quarters of this $6.81-billion decline is attributed to cross-currency variations.
According to the status paper on external debt presented to Parliament, the actual drop in debt stocks was only $1.69 billion. The remaining $5.12-billion decline was caused by the dollars appreciation against major international currencies, which caused the value of the external debt stock to fall.
The paper cautions that this trend should not lead to complacency. The size of debt is still high by international standards, and debt-service payments continue to make a sizeable claim on our foreign exchange earnings, it states. The paper, therefore, calls for sustaining the momentum of growth exports, effective management of existing debt and planning future borrowings levels.
The share of concessional debt remained almost unchanged between March 1995 and March 1996 at 45 per cent. The proportion of short-term debt (of less than one-year maturity) in the total debt stock, after dropping to 3.9 per cent at the end of 1993-94, increased to 4.3 per cent at the end of 1994-95 and further to 5.5 per cent in March 1996.
Debt service payments as a proportion of current receipts, which declined steadily from 35.25 per cent in 1990-91 to 26.91 per cent in 1993-94, rose to 27.48 per cent in 1994-95 before declining to 25.70 per cent in 1995-96.
The currency-wise composition of debt stock is overwhelmingly in favour of the dollar. The proportion increased from 41.41 per cent in March 1994 to 42.87 per cent in March 1996. Special drawing rights (SDR) accounted for 14.17 per cent (14.91 per cent in March 1995), while the proportion of the Japanese yen rose marginally to 13.85 per cent (13.75 per cent) over the same period. The corresponding figures for the deutsche mark were 6.95 per cent and 6.29 per cent respectively.
The data presented in the paper shows that in 1995-96, the dollar appreciated by 6.8 per cent against SDRs, 8.9 per cent against the rupee, 18.9 per cent against the yen and 6.7 per cent against the deutsche mark.
This strengthening of the dollar resulted in a valuation gain of $5.12 billion to the countrys debt stock.
