New Delhi, March 30: The country’s external debt has increased by $6.2 billion to $142.7 billion at the end of December 2006. The rise is attributed mainly to the surge in multilateral debt, external commercial borrowings and deposits by non- resident Indians (NRIs). However, there has been a marginal decline in short-term debt, a finance ministry release said.

According to the figures, the country’s debt increased from $136.5 billion (Rs 627,112 crore) at the end of September 2006 to $142.7 billion (Rs 632,051 crore) as on December 31, 2006.

Between September and December last year, commercial borrowings by India Inc rose 11 per cent from Rs 32,421 crore to Rs 35,980 crore.

With interest rates continuing to rise in the domestic market, analysts felt that companies are finding it cheaper to borrow abroad.

During the current financial year, the government has put a ceiling of $22 billion on external commercial borrowings (ECBs), while the cap on an individual company is $500 million.

While long-term debt between September and December increased by $6,798 million to $132,641 million, short-term debt declined by $610 million to $10,015 million.

Under long-term debt, all the components showed an increase. While multilateral debt rose by $975 million, bilateral debt showed an increase of $36 million. Export credit outstanding rose by $299 million.

Government debt has declined from $59.502 billion (60.1 per cent of total external debt) to $47.632 billion (33.4 per cent) during the October-December quarter.

The share of private debt in total debt has continued to rise over the past decade. It has increased from $39.506 billion (39.9 per cent of total debt) at March-end 1995 to $95.024 billion (66.6 per cent) at the end of December 2006.

Trade deficit

India’s merchandise exports growth declined in the third quarter of the current financial year to a moderate 14 per cent against 21.2 per cent in the year-ago period, while trade deficit widened to $19 billion from $13 billion in the same period last year.

However, current account deficit narrowed to $3 billion against $4.8 billion a year ago due to large invisible receipts, data released by RBI revealed.