The finance ministry unveiled that the external debt has taken a bigger shape from the last quarter. It has hiked 5.1% since the end of March 2017, making the debt amount a whopping 495.7 billion dollars. The experts are blaming the foreign investments in the debt segment of the capital market to be the prime contributor to the extreme hike in the debt amount.
The external debt has been accentuating on a recurring basis. September 2017 witnessed a hike of 2.1%, amounting to 10 billion dollars. The hike was huge as compared to the amount on the end of June 2017.
As per the Finance Ministry, the major contributor that led to the steep acceleration of the debt amount during this period of time is the hike in foreign portfolio investment (FPI) that belonged to the debt segment of the domestic capital market along with the commercial borrowings.
The trade-related credits that were taken initially for a short period of time added to the entire debt amount in a huge way. The ministry also disclosed that the maturity pattern of the external debt of India points towards the long-term borrowings.
It was observed that by the end of September 2017, the long-term external debt had a share of 81.3% of the entire amount whereas the rest 17.7% of the total amount was accountable for the short-term external debts.
Out of the entire debt amount, the government debt is 21.6% and the non-government debt is 78.4%. The share of government hiked steeply from 19.4 to 21.6% in a span of a few months.
The US dollar dominated the debt responsible for 50% of the total external debt at the end of September 2017, which is followed by the Rupee, SDR, Japanese Yen, Euro, Pound Sterling, and others.