India's stock of external debt stood at $95.72 billion at the end of December 1998, up from $93.91 billion as on March 31, 1998. However, the percentage of short term debt to the total debt came down to 3.8 per cent from 5.4 per cent during the corresponding period. Also, the ratio of external debt to GDP was down to 23 per cent from 23.8 per cent during the period.

The status report released by the finance ministry on Tuesday has stressed that improvement in country's external indebtedness position in recent years was "not by default but by design".

However, at the same time the paper called for monitoring all contractual contingent liabilities arising out of both debt and non-debt liabilities as they have budgetary implications.

The improvementin the debt position, according to the paper, was on account of conscious debt management policy which emphasised high growth rate of exports, keeping maturity structure as well as the total amount of commercial debt under manageable limits, prioritising the use of commercial credit and encouraging foreign investment. The status report also took comfort from the fact that India has emerged relatively unscathed from the Asian crisis and the global contagion but stressed that gains already made would have to be consolidated further and short-term debt management would continue to be an area of high priority.

Another area of priority, according to the paper, was to develop a sovereign external debt management model with objectives of costs and risks minimisation. The benchmark currency, interest and maturity mix could be used as target configuration for borrowing and debt management decision. The model, it suggested, should be dynamic enough to take care of the changing situations.

Referring to the keyindicators, the paper pointed out that debt-service ratio, which reached a peak of 35.3 per cent in 1990-91 declined steadily to 19.8 per cent of the current receipts in 1997-98. For the first three quarters of 1998-99, the ratio is estimated at 19.4 per cent only.

Similarly, the debt to GDP ratio has also come down from a high of 37.7 per cent in 1991-92 to 23.8 per cent in 1997-98. At the end of December 1998, the debt to GDP ratio slipped further to 23 per cent.

India's short-term debt which was a crucial factor in the overall debt management of the country has been low by international standards. The short-term component declined from 7.2 per cent of the total debt at the end of March 1997 to 3.8 per cent on December 31, 1998. It stated that the structural changes that were evident in the composition of India's external debt continued in 1997-98. The share of debt on concessional terms declined from 45.3 per cent at the end of March 1995 to 39.3 per cent on December 31, 1998.