Page 485 - ES 2020-21_Volume-1-2 [28-01-21]

112 Economic Survey 2020-21 Volume 2

Reference
John Hawkins and Philip Turner. (2000). Managing foreign debt and liquidity risks in
emerging economies: an overview. BIS.
Cordella, T., Ricci, L., & Ruiz-Arranz, M.“Debt Overhand or Debt Irrelevance? Revisiting
the Debt Growth Link”, Staff Papers, Vol. 57., IMF, Washington DC, 2010

Cohen, Daniel, "Growth and External Debt: A New Perspective on the African and Latin
American Tragedies",Centre for Economic Policy Research Discussion Paper, No. 1753, 1997.

Clements, Benedict, Rina Bhattacharya, and Toan Quoc Nguyen, “External Debt, Public
Investment, and Growth in Low-Income Countries”, Working Paper 03/249, International
Monetary Fund, 2003.

Pattillo, Catherine, Hélène Poirson, and Luca Ricci, “External Debt and Growth”, Working
Paper 02/69, International Monetary Fund, Washington, 2002.
Ministry of Finance. (2020). India's External Debt - A Status Report: 2019-2020.

Overall BOP

3.26 India, being a developing and emerging market economy, typically runs a deficit on the
current account to supplement domestic savings with foreign savings to fund higher investment.
The current account deficit is usually financed by a capital account surplus. However, since Q4:
FY 2019-20, India has been experiencing a current account surplus along with robust capital
inflows leading to a BoP surplus (Figure 16).

Figure 16: Trends in India's BoP

FDI FPI
ECB Short Term Trade Credit
Banking Capital Forex Reserves (Increase - / Decrease +)
6 Other Capital CAB

4
2 0
Per cent of GDP -2

-4
-6
-8
-10
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2018-19 2019-20 2020-21

Source: RBI
Details available at Annexure.
Indian Rupee (`) Exchange Rate
3.27 Indian ` depreciated by 1.4 per cent (y-o-y basis) vis-à-vis US$ in 2019-20. The `
appreciated by 1.9 per cent against US$ between end-October 2019 and end-March 2020.