India's external debt rises by 30pc in 2007-08

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NEW DELHI, Sept 6 (PTI) India's external debt recorded an increase of 30.4 per cent to USD 221.2 billion during 2007-08 primarily on account of high overseas corporate borrowings, short-term debt and depreciation of dollar. brCorporate overseas borrowings rose by 39.5 per cent and short-term borrowings increased by 34.8 per cent, an official release said. brHowever, the government's debt as a proportion of total external debt declined from 28.4 per cent to 25.6 per cent. brAlso, the weakening of dollar accounted for around 20 per cent of the total increase in external debt. brWith the appreciation of rupee primarily against the dollar, increase in external debt in rupee terms was lower at 19.6 per cent during the year. brThe release further said that external debt was in the comfort zone with the foreign exchange cover of the debt being at 140 per cent during the last fiscal, up from 117.4 per cent a year- ago. brDebt service ratio, which indicates the ability to repay loans, remained low at 5.4 per cent during 2007-08, though this was marginally higher by 0.6 percentage points over the previous year. brOther indicators like ratio of external debt to gross domestic product, which indicates the indebtedness of a country, was 18.8 per cent during 2007-08 and the ratio of short-term debt to foreign exchange reserves stood at 14.3 per cent. brThe ratio of short-term debt to total external debt was 20 per cent in the end of March this year.