Saying that India’s external debt position manageable, the Centre has shrugged off the fears about India’s external debt, saying out of India’s total external liability of $620.7 billion, the Centre’s share is just $130.8 billion, 21% of the total debt liability, which also includes India’s Special Drawing Right (SDR) allocation. About 40% of the debt is by non-financial corporations. External debt declined from Centre’s share in this is 3%, or $7.7 billion to 4.7% in FY23. There was a fear over the fact that out of India’s external debt US$267 billion repayments are due within one year. Out of this, the Government’s share only $7.7 billion or less than 3%, thus the debt burden is comfortable and manageable.
RBI data discloses that central government debt declined from 52.2% of GDP at end of FY 2013-14 to 51.8% of GDP at end of FY 2019-20, but again shot up in FY21 by about 10% of GDP in a single year mainly on account of Covid-19.India’s gross public debt at 86.9% of the GDP may be high but better compared to many other countries. The US has a gross public debt of 125.6%, France has 112.6%, Canada 101.8%, Brazil 91.9% and the UK 87.8% of their respective GDPs. External debt as a percentage of total debt has declined from about 6.4% in 2013-14 to 4.7% in 2021-22.
