India expects to contain ballooning CAD: Commerce Secretary Rao says

India expects to contain ballooning CAD: Commerce Secretary
A ballooning current account deficit (CAD), which has been underlined as one of the main reasons for pushing the rupee into doldrums remains the key challenge for policymakers of Asia's third biggest economy.

Commerce Secretary SR Rao on Saturday expressed confidence that policymakers will be able to stem the CAD in the next couple of months as export rise and imports fall amid the record depreciation in the Indian currency.

"Rupee depreciation will contain imports further and we expect export going up. We will see better containment of CAD in the next couple of months. The clear indications are already there," Rao said.

"Our import bills have started coming down, after a series of measures have been put into place, especially on precious metals and the so-called non-essential imports", Rao added. .

India's CAD surged to 4.8 per cent of the GDP in FY 2012-13 and the government is targeting CAD to be 3.7 per cent this fiscal.

With the US economy picking up pace and the Euro area out of a record long recession, the outlook for India's exports has brightened considerably.

At the same time, non-oil imports including gold are likely to fall after the government imposed restrictions on investment in gold bars, coins and hiked custom duty on bullion imports, containing the import bill.

Read more about: cad, bullion, custom duty, import bill
Story first published: Monday, August 26, 2013, 9:10 [IST]
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