External Debt Current Affairs - 2020

Status Paper on Government Debt released

On May 22, 2020, the Ministry of Finance released Status Paper on Government Debt 2018-19. According to the report, the overall debt of centres and states declined by 68.7% in March 2018 to 68.6% in 2019.

Highlights

The Status Paper on Government Debt is being produced by the Ministry of Finance since 2010. Current debt of India stands at Rs 1.3 crore crore.

Key Findings of paper

The debt of central government dropped marginally from 45.8% in 2017-18 to 45.7% in 2019, The external debt was 2.7% of GDP. The Average Interest Cost of the centre remained unchanged in the year 2018 to 2019. Around 94% of centre’s liabilities were of domestic debts.

The tenure of the longest security was 37 years.

Government Debt

The Government Debts are classified as internal debt and external debt. The Internal Debts include non-marketable and marketable debt. External debt refers to debt borrowed from all the sources outside the country.

Government Liabilities are classified into liabilities in public account and debt contracted against Consolidated Funds of India.

RBI and Finance Ministry to meet to decide on First Half Borrowing Plan

The Finance Ministry and the Reserve Bank of India is to hold a meeting on March 31, 2020 to discuss about the first half borrowing plan for the year 2020-21. For the first time in Indian history, the meeting is to be held through video conferencing.

The Plan

According to the Union Budget 2020-21, the GoI plans to borrow Rs 5.36 lakh crore rupees. This is higher than last year borrowing which was Rs 4.99 lakh crore. With this, the gross borrowing is to become Rs 7.8 trillion. GoI has planned repayment of loans at Rs 2.35 trillion.

India’s Debts

There are several components of debts of India. The borrowings are mainly accounted as external debt of the country. The external debt of India as of December 2018 is 521 billion USD. This includes money borrowed from international financial institutions, commercial banks, IMF, World Bank, Asian Development Bank, foreign governments, etc.

India’s debts are held in different currencies. 48.2% of the country’s debts are held in dollar, 4.6% as Japanese Yen, 5.7% as Special Drawing Rights, 3.2% in Euros.