Current account deficit worsens: RBI

Import payments, reflecting the buoyant economic activity, increased sharply by 63.2 per cent — oil imports were up by 31 per cent and non-oil import payments by 77.9 per cent.

Data from the central bank on Friday showed the merchandise trade deficit of $15.81 billion was largely offset by robust inflows from invisibles, which included earnings from services such as software exports and transfers from non-resident Indians.

“Invisible gross receipts remained buoyant reflecting the underlying dynamism in travel earnings, sustained pace of export of software and other business and professional services and stable remittances from overseas Indians,” the central bank said.

The RBI said the balance of payments’ surplus at the end of the April-June quarter shrunk to $1.25 billion from $12.63 billion in the January-March quarter.

Meanwhile, India’s external debt fell by $1.31 billion to $122.15 billion in April-June from the previous quarter, mainly due to the dollar’s appreciation against other major currencies. RBI said short-term debt in the quarter stood at $7.28 billion, 6 per cent of the total debt and down from $7.52 billion at March-end.

But RBI said external commercial borrowings (ECBs) rose during April-June, with companies’ syndicated loans and overseas bond issues pushing up the ECB total to $27.2 billion. Corporates have made a beeline to raise foreign currency loans at rates lower than domestic ones to fund capital expenditure plans. Forex reserves exceeded external debt by $16.2 billion at June-end.

Priority sector’s share of NPAs fall

MUMBAI: Latest data released by RBI regarding the composition of bad assets in public sector banks shows that in the financial year 2004, priority sector contributed less NPAs to the total NPAs of public sector banks. Further, the amount of priority sector NPAs declined during the reporting fiscal (FY2004) as compared to the preceding fiscal.