Winning Bizness Sports Desk
Mumbai. India's overseas debt is increasing day by day. Preliminary data released by the Reserve Bank has revealed that India's total external debt stood at $629 billion as of June 2023. This loan has increased compared to last year. External debt is 2.7 percent higher this year than last year. It has been revealed that there has been a significant increase in NRI deposits during this period. Reserve Bank of India data shows that the only reason for the rise in foreign debt in the last one year was the significant increase in NRI deposits. According to the central bank, all other factors contributing to foreign debt have remained roughly constant during this period. Except for the Central Bank, NRI deposits are mainly through deposit-taking corporations and are counted as loans.
How did NRI deposits increase?
Such deposits rose 6.5 percent to $167 billion in the June quarter, according to Reserve Bank data. A year ago, that is, after the end of the June 2022 quarter, the figure was $157 billion. While deposits of non-financial corporations remained steady at $250 billion. The data also shows that general government debt has decreased, while non-government debt has increased. US dollar denominated debt accounts for the largest share of India's total external debt. After the end of the June 2023 quarter, their stake was 54.4 percent. Then second is the loan in Indian rupees. The share of which is currently 30.4 percent. At the same time, the South African rand ranked third with a contribution of 5.7 percent, the Japanese yen ranked fourth with a contribution of 5.7 percent and the euro ranked fifth with a contribution of 3 percent.
External debt and GDP ratio decreased
The ratio of external debt to GDP has decreased in the June quarter. The ratio was 18.8 percent at the end of the March 2023 quarter, which fell to 18.6 percent at the end of the June quarter. During this period, there has been a good increase in loan servicing i.e. loan repayment. It was 5.3 percent at the end of March 2023, which has increased to 6.8 percent at the end of June 2023.