India ranks eighth among the world's most indebted countries, but prudent external sector policies pursued since the economic reform in 1990s placed her at a comfortable level, the Economic Survey said on Friday.

With an external debt of $113.590 billion till September 2004, the economic survey said, notwithstanding the increase, albeit moderate, in the absolute level of external debt, 'both solvency and liquidity indicators show signs of continuous improvement.'

Quoting the World Bank's Global Development Finance 2004, the survey said in terms of international comparison, India ranks eighth among the top 15 debtor countries. It, however, said a prudent external sector policy, particularly in relation to external debt, pursued since 1991 placed India's external debt position at a comfortable level.

• Economic Survey 2004-05: Complete Coverage

Though the policy focus had been on concessional and relatively less expensive source of funds, it said the share of concessional loans in the country's external debt fell as per the data till September 2004.

The recent initiatives towards external debt moderation include pre-payment of costly government and non-government loans, rationalisation of interest rates as well as structure of NRI deposits, end-use stipulations for external commercial borrowings and restriction on trade credits, it said.

The survey found that India's external debt has shifted in favour of private debt comprising Non-Resident Indian deposits and export credit and commercial borrowings.

"The ratio of government and non-government debt, which was roughly 60:40 during 1990 to 1995, declined to 40:60 by end-September," it said.