India 5th most indebted among developing nations

The government on Friday said that India is the fifth most indebted country among the 20 developing nations, but its debt is within manageable limits.

"According to the 'Global Development Finance-2011' published by the World Bank, India ranked fifth in 2009 in terms of absolute external debt stock among the top 20 debtor developing countries," Finance Minister Pranab Mukherjee said in reply to a query during Question Hour in Lok Sabha.

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However, he maintained that India had managed its external debt well and there was no cause for concern.

"As a result of prudent external debt management, India's external debt has remained within manageable limits, as indicated by the external debt to GDP ratio of 17.3 per cent and debt-service ratio of 4.2 per cent in 2010-11," Mukherjee said.

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He informed the House that the external debt management policy of the government emphasises on raising sovereign credit on concessional terms with longer maturities; regulating external commercial borrowings through end-use and all-in-cost restrictions; rationalising interest rates on NRI deposits and monitoring long and short term debt.

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India's long-term external debt stood at $240.9 billion at March-2011 end, short-term external debt at $ 65 billion.

Hence the total external debt adds up to $305.9 billion. India's external debt, on government account under external assistance, stood at $62.4 billion at March-end, 2011 comprising multilateral debt of $ 42.6 billion and bilateral debt of $ 19.8 billion.

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The other developing countries that have higher debt than India include China, Russian Federation, Brazil and Turkey, respectively, the finance minister said.