The Centre will continue with its policy of proactively liquidating high cost external debt, according to a written reply made by the finance ministry in the Rajya Sabha on Tuesday.
The ministry has said that taking advantage of the comfortable foreign exchange reserves position and low interest rates, the policy of prudently managing the external liabilities and redeeming higher cost component of the country's external debt is proposed to be continued.
The ministry has also said that though the total external debt stock of the country has risen to $105 billion from $98.76 billion in nine months, all important external debt indicators like debt-GDP ratio, debt service to current receipts ratio and short term debt to external debt have progressively shown improvement.
In reply to another question the ministry has said the per capita external debt stood at $101.2 as on December 31, 2002.
It has also said that bilateral debt amounting to about Rs 7,600 crore (Rs 76 billion) is proposed to be prepaid. This includes Rs 2,139.51 crore (Rs 21.395 billion) of debt from the Netherlands, Rs 1,967.89 crore (Rs 19.678 billion) from Russian Federation and Rs 464.24 crore (Rs 4.642 billion) from Italy.
The debt from these 14 countries are being prepaid as part of Finance Minister Jaswant Singh's announcement in the budget, for this fiscal to stop taking bilateral aid.
Quoting from the Global Development Finance report of the World Bank, the ministry has said that India has graduated from moderately indebted to less indebted country by 1999.
Along with the policy of prepaying high cost debt, the government is also encouraging longer maturity profiles for external debt and pushing for non debt creating financial flows.
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