External Debt Scenario in India: Issue of Debt Sustainability

Abstract

Optimized handling of external debt scenario is always a priority issue for any government at any time. While developmental concerns require foreign aid, at the same time it is always important to keep a tab on the level of borrowings. The extreme external debt situation which India faced in 1990 made it learn many important lessons, and also led to the second generation reforms in its economy.

This paper examines the concept of external debt sustainability and thereupon analyzes the situation of India and its performance over the years vis-a-vis its external debt scenario.

Keywords: External Debt, Debt Sustainability, India

JEL Classification: F41, F47