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Rediff.com  » Business » India's net foreign debt shrinks to $1.5 bn

India's net foreign debt shrinks to $1.5 bn

Source: PTI
Last updated on: July 24, 2009 21:06 IST
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The Indian flag. Photograph: ReutersIndia's net foreign debt flows plunged to $1.5 billion in 2008-09, sharply lower than $53.5 billion registered in 2007-08, Minister of State for Finance Namo Narain Meena said.

"The Union government has been following prudent external debt management policies to manage external debt flows, consistent with overall macroeconomic requirements and to keep the external debt level within manageable limits," Meena told the Lok Sabha in a written reply on Friday.

Net foreign debt flows include net receipts on account of External Assistance, External Commercial Borrowings, deposits of Non Resident Indians, short-term trade credits and rupee debt service, he said quoting the Reserve Bank.

The amount of net foreign debt flows in 2006-07 was $26,341 million, which more than doubled to $53,566 million in 2007-08. It, however, shrunk to $1,503 million in the previous fiscal during which the economy faced severe slowdown due to the global financial crisis.

On the "prudent" policies, he said, "These policies include raising loans with longer maturities, regulating the levels of commercial borrowings and their end-use, rationalising interest rates on NRI deposits, monitoring long and short-term debt and encouraging non-debt creating capital flows.

Image: The Indian flag. Photograph: Reuters

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