The current account balance recorded a deficit of $1.7 billion (0.2 per cent of gross domestic product) in the third quarter of 2020-21 after a surplus of $15.1 billion (2.4 per cent of GDP) in the second quarter of 2020-21 and $19.0 billion (3.7 per cent of GDP) in the first quarter of 2020-21. As per data released by the Reserve Bank of India (RBI), a current account deficit of $2.6 billion (0.4 per cent of GDP) was recorded a year ago — Q3 of FY20. Underlying the current account deficit in Q3 was a rise in the merchandise trade deficit to $34.5 billion from $14.8 billion in the preceding quarter, and an increase in net investment income payments. The RBI said net services receipts increased, both sequentially and on a year-on-year basis, primarily on the back of higher net export earnings from computer services. “Private transfer receipts, mainly representing remittances by Indians employed overseas, declined marginally on a y-o-y basis but improved sequentially by 1.5 per cent to $20.7 billion in Q3 of 2020-21,” the central bank said.
