India’s Current Account Deficit (CAD) is likely to be around 2 per cent of GDP in the coming few years due to slackening of gold imports, among other factors, Prime Minister’s Economic Advisory Council Chairman C Rangarajan said today.
“With inflation showing signs of decline and gold prices also not rising, the attraction of gold as an asset is coming down. And as we go ahead we should find the demand for gold falling. There are also other factors contributing to improvement in exports.
“Therefore, I expect the current account deficit to remain around two per cent of the GDP over the years,” Rangarajan told reporters here on the sidelines of a programme organised by Centre for Economic and Social Studies.
Finance Minister P Chidambaram recently said the CAD was brought down significantly to USD 32 billion in 2013-14 as against USD 88 billion during 2012-13 and fiscal deficit contained within the target in the last fiscal.
The CAD in 2012-13 was at 4.7 per cent of GDP and in 2013-14 it will be only 1.7 per cent, the Finance Minister had said.
- Soon You Could Get Plastic Currency Notes: Find Out More
- Ranveer Singh and Vaani Kapoor Starrer Befikre Gets A Thumbs Up
- Supreme Court Seeks Centre’s Response Over Various Issues Regarding Demonetisation
- Defence Minister Manohar Parrikar Writes To West Bengal CM Mamata Banerjee
- Bigg Boss 10 December 8 Review: Swami Om Feels Cheated, lashes Out At Gaurav For Jail Punishment
- South Korean President Park Geun-Hye Impeached Over Corruption Scandal
- Former Air Chief SP Tyagi Arrested In VVIP Chopper Scam
- After Congress Vice President Rahul Gandhi, Liquor Baron Vijay Mallya’s Twitter Account Hacked
- Find Out What PM Narendra Modi Told Cabinet Over Demonetisation Decision
- Home Minister Rajnath Singh Assures Safety Of All Tourists Stranded On Havelock Island
- Government To Waive Service Tax On Debit, Credit Card Transactions Of Up To Rs 2,000
- President Pranab Mukherjee Criticises Parliament Disruptions Over Demonetisation
- Pakistan International Airlines Flight Carrying Over 40 Passenger On Board Crashes
- Shah Rukh Khan On Raees Clash With Kaabil: It’s Impossible To Have A Solo Release In India
- US-President Elect Donald Trump Named TIME’s Person Of The Year 2016
Replying to a query, he said administrative restrictions that were imposed on gold import may be relaxed as the prices of the yellow metal are stabilised.
“I think the restrictions that have been imposed administratively will be relaxed. I think the import of gold will come down because of the natural factors like inflation coming down, and gold prices not rising and the attraction of gold as an asset will come down. That’s what reflects in the reduction of gold import,” he said.
Gold and silver imports contracted by 40 per cent to USD 33.46 billion in 2013-14, or just seven per cent of total import bill, against 11 per cent in the earlier fiscal, after the government put in place steps to check their runaway imports.
On the reported likely El Nino effect on the country’s GDP, Rangarajan said “We do not know what the ultimate impact will be. Sometimes these forecasts also will go wrong. So we will have to wait and see”.
An HSBC report recently said inflation in India may remain sticky in the current financial year as a possible El Nino effect on the monsoon is likely to push up food prices and geopolitical uncertainties are likely to pump up global commodity rates.