HEALTH-Doctors Strike

White Paper points out, flows of debt-creating capital provide only a partial basis for the estimation of changes in the dollar value of external debt because, subsequent to March 1995, the dollar has in tact appreciated against other currencies. So the dollar value of India's debt could be significantly lower at the end of March 1996 than a year back. If this docs indeed happen, the government is unlikely to miss the opportunity to capitalise on its 'success" in significantly reducing external debt in its pre-election propaganda. But, given the disconcerting movements in the current account deficit and in investment flows indicated above, the process of debt reduction in the context of declining reserves and increasing rupee instability only emphasises that, because of recent shifts in the structure of the capital account, debt need not be a reliable index of the actual external payments situation. What is more, if the decline in reserves persists, as it is likely to, the government may once again be forced to revert to debt-financing, assuming of course that the international banks will continue to regard India as a creditworthy borrower.