The total amount of the central government's debt/liability is estimated at about Rs 155.8 lakh crore, which is 57.3% of GDP. The estimate was as on March 31, 2023. In a reply to a question in Lok Sabha on Monday, Union Finance Minister Nirmala Sitharaman said that the external debt is estimated to be Rs 7.03 lakh crore at the current exchange rate. The amount is about 2.6% of India's GDP.
Sitharaman said the share of the external debt is about 4.5% of the total debt/liability of the central government and less than 3% of the GDP. "The external debt is mostly financed by multilateral and bilateral agencies at concessional rates. Therefore, the risk profile stands out as safe and prudent," she said.
"The Reserve Bank of India, in consultation with the government, recently announced various measures to diversify and expand the sources of forex funding to mitigate the exchange rate volatility and global spillovers," Sitharaman added
Listing out the measures, she said: "Incremental foreign currency non-resident (Bank) and non-resident (external) Rupee deposit liabilities were exempted from the maintenance of Cash Reserve Ratio (CRR) and statutory liquidity ratio (SLR) for deposits have been mobilized up to November 4, 2022."
"Fresh FCNR(B) and NRE deposits were exempted from the extant regulation on interest rates, i.e. interest rates shall not be higher than those offered by the banks on comparable domestic rupee term deposits, till October 31, 2022. The regulatory regime relating to foreign portfolio investments in debt flows has been revised to encourage foreign investment in Indian debt instruments," she further said.
"The external commercial borrowing limit (under automatic route) has been raised to US$1.5 billion and the all-in-cost ceiling has been raised by 100 basis points in select cases up to December 31, 2022," Sitharaman said in her reply.
"In order to promote the growth of exports from India and to support the increasing interest of the global trading community in the Indian Rupee, RBI has put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in INR on July 11, 2022," Sitharaman added.