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External debt
Why is it in news?
- According to Finance Ministry report, India’s total external debt increased by 2.8% to $558.5 billion at the end of March 2020.
- External debt was $543 billion a year earlier.
Details:
- The rise in external debt is mainly on account of a rise in commercial borrowings.
- The ratio of foreign currency reserves to external debt stood at 85.5% as at end-March, compared to 76% in 2019 March.
- External debt as a ratio to GDP rose marginally to 20.6%, from 19.8 %.
- Sovereign debt shrank 3% to $100.9 billion.
- Non-sovereign debt, on the other hand, rose 4.2% to $457.7 billion mainly due to an increase in commercial borrowings.
- Non-financial corporations accounted for 42% of total debt.