Beating expectations and showing another sign of revival, the Indian economy expanded by 5.7 percent during the first quarter of the current financial year to log the highest growth yet in nine quarters, official data showed. The gross domestic product (GDP), which is the aggregate market value of all the goods and services produced in the country, had expanded by just 4.6 percent in the previous quarter, that is January-March, and by 4.7 percent in the like quarter of last fiscal.
The 5.7 percent growth in April-June quarter is also the highest since the 6 percent increase logged during October-December quarter of 2011-12, as per data compiled by the Central Statistics Office (CSO).
Fiscal Deficit
India’s fiscal deficit during April-July stood at Rs.3.24 lakh crore or 61.2 percent of the full year target, government data showed. The deficit was 62.8 percent during the corresponding period in the previous fiscal year.
According to the data released by the Controller General of Accounts, during the period under review the total expenditure of the government was over Rs.5.03 lakh crore or 28.1 percent of the entire year estimates.
The fiscal deficit was over Rs 5.08 lakh crore or 4.5 percent of the GDP (Gross Domestic Product) in 2013-14.
The government had put in place measures for fiscal consolidation to bring down the deficit to three percent of the GDP by 2016-17.
The fiscal deficit target for the entire 2014-15 has been pegged at Rs.5.31 lakh crore or 4.1 percent of the GDP. However, the total revenue and non-debt capital collection in the period under review stood at over Rs.1.79 lakh
External Debt
Notwithstanding the increase in India’s external debt stock during 2013-14 to over $440 billion, crucial debt indicators such as external debt-GDP ratio and debt service ratio remained in the comfort zoneIn its annual publication titled ‘India’s external debt: A status report 2013-14’ released here Friday, the Department of Economic Affairs (DEA) said the rise in external debt was due to long-term debt, particularly NRI deposits.
“The surge in NRI deposits reflected the impact of fresh FCNR(B) deposits mobilised under the swap scheme during September-November 2013 to tide over the difficult BoP (balance of payments) situation in the initial parts of the year,” the DEA said.
The country’s external debt stock increased 7.6 percent over the last fiscal and stood at $440.6 billion at end-March 2014, increasing by $31.2 billion over that at end-March 2013.
External debt of the country continues to be dominated by the long-term borrowings.
Long-term external debt at the end of the last fiscal was $351.4 billion, an increase of 12.4 percent over the level at end-March 2013. It accounted for 79.7 percent of total external debt at end-March 2014 vis-à-vis 76.4 percent at end-March 2013.
Short-term external debt declined 7.7 percent over March 2013, and stood at $89.2 billion at end-March 2014, owing to the compression in import arising from the slowdown in aggregate demand and restrictions on gold imports.
The share of short-term external debt in total external debt declined from 23.6 percent at end-March 2013 to 20.3 percent at end-March 2014.
According to the report, India’s external debt during 2013-14 has remained within manageable limits as indicated by the external debt-GDP ratio of 23.3 percent and debt service ratio of 5.9 percent.
India’s key debt indicators compare well with other indebted developing countries. According to the World Bank’s International Debt Statistics, 2014, India’s position in 2012 was third in terms of absolute external debt stock, after China and Brazil.