India's external debt outstanding at the end of December 2007 was US$ 201.4 billion (Rs.794,017 crore), reflecting a rise of US$ 10.3 billion over the quarter. As compared to the level of US$ 169.7 billion at end-March 2007, India’s external debt at end-December 2007 increased by US$ 31.8 billion. Valuation change, due to the depreciation of US dollar vis-a-vis major international currencies and Indian Rupees, accounted for US$ 1.1 billion of the increase during the quarter and US$ 6.0 billion during April-December 2007. The increase in external debt was mainly brought about by commercial borrowing and short-term debt.

Based on original maturity, long-term debt accounted for 82.6 per cent and short-term debt comprised 17.4 per cent. Long-term debt rose by US$ 6.3 billion to US$ 166.2 billion and short-term debt by US$ 4 billion to US$ 35.2 billion over the quarter. Amongst the components of long-term debt, commercial borrowing increased by US$ 4.9 billion (9.4 per cent) to US$ 57 billion. While NRI deposits declined by 1.5 per cent (US$ 0.6 billion) to US$ 43 billion, multilateral debt, bilateral debt and export credit increased marginally to reach US$ 37.9 billion, US$ 17.3 billion and US$ 8.9 billion, respectively, at end-December 2007. Rupee debt continued to remain around the level of US$ 2 billion. Under short-term debt, while trade related credits rose by around US$ 4 billion, FII debt investment in Government papers rose by US$ 262 million over the quarter.

In the endeavour to improve the analytical content of the report, the external debt stock at end-December 2007 is provided in terms of residual maturity as well, for the first time in the quarterly debt data release. Based on residual maturity, long-term debt accounted for 64 per cent of total debt at end-December 2007. Short-term debt by residual maturity, consisting of principal repayments due during a one-year reference period under medium and long-term loans, and short-term debt with original maturity of one year or less, accounted for 36 per cent of the total external debt.

The share of government debt in total external debt stood at 26.3 per cent (US$ 53 billion). Correspondingly, the share of non-Government (private) debt was 73.7 per cent (US$ 148.5 billion).

At end-December 2007, India’s foreign exchange reserves which include foreign currency assets of the Reserve Bank of India, gold, SDRs and Reserve Tranche Position in the International Monetary Fund (IMF) stood at US$ 275.3 billion, providing a cover of 137 per cent to total external debt, while the foreign currency assets of the RBI at US$ 266.6 billion provided a cover of 132 per cent.

The share of US dollar in India’s external debt portfolio has showed an increasing trend over the last few years. It further increased to 54.5 per cent at end-December 2007 from 52 per cent at end-March 2007.

The complete text of this report is available on the Ministry of Finance Website:

The release on balance of payments data for October-December 2007 is available on the Reserve Bank of India’s website:

http://www.rbi.org.in

The Press Information Bureau is requested to place this Press Release in public domain.

Shri B.S.Chauhan,
Director (Press Relations),
Department of Economic Affairs,
Ministry of Finance,
North Block,
New Delhi

Government of India have announced the issue of '8.35 per cent SBI Rights Issue Government of India Special Bonds, 2024’ for Rs.9996.012 crore (nominal). The Special Bonds are being issued at par to State Bank of India on March 27, 2008 (Thursday) as subscription towards Rights Issue of equity shares of State Bank of India.

2. The investment in the Special Bonds by the banks and Insurance Companies will not be reckoned as an eligible investment in Government securities for their statutory requirements. However, such investment by the insurance companies will be eligible to be reckoned as investment under “other Approved Securities” category as defined under Insurance Regulatory and Development Authority (Investment) Regulations, 2000. Further, the investment by the Provident Funds, Gratuity Funds, Superannuation Funds, etc. in the Special Bonds will be treated as an eligible investment under the administrative order of the Ministry of Finance.

3. The Special Bonds will be transferable and eligible for market ready forward transactions (Repo). The bonds, however, will not be an eligible underlying security for ready forward transactions (Repo/Reverse Repo) with the Reserve Bank of India.

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF ECONOMIC AFFAIRS

New Delhi Dated, March 27, 2008

Government of India have announced the issue of ‘8.40 per cent Oil Marketing Companies’ Government of India Special Bonds, 2025’ for Rs.9296.92 crore (nominal). The Special Bonds are being issued to four Oil Marketing Companies as compensation towards estimated under-recoveries on account of sale of sensitive petroleum products during the current financial year (Rs.9076.41 crore) and settlement of contingent liabilities of Oil and Natural Gas Corporation Ltd. (Rs.197.37 crore) and Indian Oil Corporation Ltd.(Rs.23.14 crore) pertaining to the APM period. The Special Bonds are being issued at par to Indian Oil Corporation Ltd. (IOC) for Rs. 5121.62 crore, Bharat Petroleum Corporation Ltd. (BPCL) for Rs.2078.92 crore, Hindustan Petroleum Corporation Ltd.(HPCL) for Rs. 1899.01 crore and Oil and Natural Gas Corporation Ltd for Rs.197.37 crore on March 28, 2008 (Friday).

3. The Special bonds will be transferable and eligible for market ready forward transactions (Repo). The bonds, however, will not be an eligible underlying security for ready forward transactions (Repo/Reverse repo) with the Reserve Bank of India.

The Government of India, in consultation with the Reserve Bank of India, announces the following calendar of Treasury Bills issuance for the period April 1, 2008 to March 31, 2009.

2. The issuances of Treasury Bills, if any, under the Market Stabilization Scheme (MSS) would be in addition to the above issuance calendar.

3. The Central Government/ the reserve Bank will continue to have the flexibility to modify the notified amount and timing of auction of Treasury Bills keeping in view the emerging requirements of the Government, market conditions and other relevant factors. The calendar is thus subject to change, if circumstances so warrant, including for reasons such as intervening holidays. Such changes, if any, will be communicated through regular press releases.

4. The auction of treasury bills will be subject to the terms and conditions specified in the General Notification No. F 2(12)-W&M/97, dated March 31, 1998 issued by Government of India, as amended from time to time.

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF ECONOMIC AFFAIRS
Dated March 24, 2008