India's External Debt - Balance Of Payments
AS per the existing practice, the external debt for the quarters ending March and June are compiled and released by the Reserve Bank of India, while the external debt for quarters ending September and December are compiled and released by the Ministry of Finance, Government of India. Accordingly, the data on external debt for the quarter ending June 2010 has been released by the Reserve Bank of India yesterday.
++ Exports recorded a growth of 37.2 per cent during Q1 of 2010-11, on a year-on- year basis, as against a decline of 31.8 per cent during Q1 of 2009-10.
++ Imports registered a growth of 35.7 per cent during Q1 of 2010-11 as against a decline of 21.7 per cent during Q1 of 2009-10.
++ Despite higher growth in exports relative to imports, the trade deficit widened during Q1 of 2010-11.
++ Private transfer receipts continued to be robust during Q1 of 2010-11.
++ Net invisibles, however, declined owing to relatively higher invisibles payments driven particularly by higher payments under investment income and also by larger payments on account of travel, transportation, business and financial services.
++ The higher trade deficit combined with the lower invisibles surplus resulted in the widening of current account deficit during Q1 of 2010-11.
++ The capital account surplus increased significantly, over the corresponding quarter of last year, mainly due to short-term credit, external commercial borrowings (ECBs), external assistance and banking capital.
++ Net foreign investment, however, was much lower than the corresponding quarter of last year mainly due to significant moderation in net inflows under foreign institutional investors (FIIs) investments. Net inflows under foreign direct investment (FDI) were also lower during the Q1 of 2010-11.
With capital account surplus being higher than the current account deficit, the overall balance was in surplus at USD 3.7 billion, which resulted in a net accretion to foreign exchange reserves of equivalent amount during the Q1 of 2010-11.