At 4.5,Jan-March CAD rises to 30-yr high

Indias current account deficit rose above expectations to 4.5 per cent of GDP,or 21.8 billion,in the January-March quarter of 2011-12 from an upwardly revised deficit of 4.4 per cent of GDP in the previous quarter,the Reserve Bank of India said

Indias current account deficit CAD rose above expectations to 4.5 per cent of GDP,or 21.8 billion,in the January-March quarter of 2011-12 from an upwardly revised deficit of 4.4 per cent of GDP in the previous quarter,the Reserve Bank of India said on Friday.

At this level,CAD was its highest in at least 30 years in the March quarter with surging imports and moderate export growth pushing up the trade deficit,keeping the balance of payments in deficit for the second quarter in a row.

According to the RBI,in 2011-12,the CAD rose to 78.2 billion 4.2 per cent of GDP from 46.0 billion 2.7 per cent in 2010-11,largely reflecting higher trade deficit on account of subdued external demand and relatively inelastic imports of petroleum,oil and lubricant,gold and silver. Net inflows under capital and financial account excluding changes in reserve assets were higher at 67.8 billion during 2011-12 as against 62 billion in 2010-11.

However,there was a drawdown of reserves to the extent of 12.8 billion during the year as against an accretion of 13.1 billion in 2010-11,the RBI said. Export growth slackened due to weak global demand,even as inelastic demand for oil and gold kept the import bill elevated,widening the trade deficit to 10.6 per cent of GDP. Invisibles inflows remained robust owing to strong private remittance inflows and software services exports,but they were not sufficient to offset the significant merchandise deficit. Net capital inflows rebounded sharply to 16.6 billion in Q4 of 2012 from 7.7 billion in the last quarter due to a sharp reversal in portfolio inflows and non-resident inflows.

Fiscal deficit touches 27 of BE in April-May
New Delhi: The Central governments fiscal deficit touched 27 per cent of the Budget estimates BE in the first two months of the current financial year,despite increase in revenue receipt. In absolute terms,the fiscal deficit in the April-May period of the current fiscal stood at Rs 1.41 lakh crore,as per the latest data of the Controller General of Accounts.

For the full 2012-13 fiscal,the government has budgeted the fiscal deficit at Rs 5.13 lakh crore,or 5.1 per cent of GDP. Last fiscal during the same period,the fiscal deficit was 32 per cent of the budget estimate.

PTI