The country’s external debt touched $390 billion in the year ended March 31, 2013, a rise of 12.9 per cent over the previous year's debt.

A higher debt indicates the vulnerability of the country’s economic position. This means, as on the reporting date, the country owes $390 billion to different stakeholders.

Almost all the parameters, which comprise the external debt situation worsened in the reporting fiscal.

External commercial borrowings by Indian companies contributed almost a third of this external debt. Worryingly, short-term debt constituted about a fourth of the country’s external debt and the share of Non-Resident Indian deposits in external debt was 18.2 per cent.

The long-term debt -- which includes India’s external commercial borrowings, borrowings from multilateral and bilateral agencies, among other things -- forms 75.2 per cent of the total external debt.

The long-term debt component has, however, shown a declining trend over the years. From 80.7 per cent in 2009 to 75.2 per cent in 2013, the long-term debt component has declined continuously.

However, the worrying trend is that the short-term debt has shown a continuous increase over the past five years. It was 19.3 per cent of the total debt in 2009 and has risen to 24.8 per cent in 2013.