What was the proportion of external debt in the Gross Domestic Product (GDP) at the end of September 2023?

Question

UnlockIAS · Accepted Answer

Correct — A, 18.6%. India's external debt (amounts owed by the government and private entities to non-resident/foreign lenders) is tracked each quarter by the Department of Economic Affairs and the RBI relative to GDP as a measure of external vulnerability. At the end of September 2023, this ratio was reported at 18.6% — quarterly figures of this kind are provisional and can be revised slightly in later reports, but 18.6% is the figure MPPSC's key accepted for this quarter.

Why the other options are wrong — (b) Well above India's actual external-debt-to-GDP ratio for that quarter, which stayed in the high-teens range through 2023.  (c) Below the actual reported ratio for the period.  (d) Far above India's actual external-debt-to-GDP ratio, which has remained comfortably in the high-teens percentage range through the 2020s.

Concept: External debt is the total amount India's government and private entities (companies, banks) owe to non-resident (foreign) lenders, in both foreign-currency and rupee terms. Comparing it to GDP — the external-debt-to-GDP ratio — is a standard indicator of a country's external vulnerability: how large its foreign obligations are relative to the size of its economy.

State PCS 2024 Q32 — Economy PYQ with Answer

State PCS 2024 Q32 — Economy PYQ with Answer