With a double-digit growth in exports and a strict check on gold imports,finance minister P Chidambaram on Friday said the current account deficit may be contained at $60 billion in 2013-14.
The CAD is likely to be perhaps at $60 billion or even below in 2013-14. This will be a significant achievement from last fiscal when it was $88 billion, he said. The finance minister had earlier set a target of $70 billion for the CAD.
Financing of the CAD is safe and comfortable and it is a fair inference that we will not dig into our reserves, he said at a press conference.
He also expects $20 billion by the month-end through RBIs liberalisation of FCNRB and Tier I capital schemes. By October 31,banks had received $13.3 billion inflows through these schemes.
The CAD projections factor the pick-up in exports over the last three months. In September 2013,Indias exports grew 11.15 per cent at a six-month high of $27.68 billion taking the trade deficit to $80.13 billion in the first half of the fiscal.
Chidambaram also expressed hope that gold imports would be contained at 20 tonne per month despite a slight pick up in imports in October due to the festive season. We have been very strict on this but in the long run,it is the best decision to be taken, he said.
Meanwhile,indicating an improvement in other macro-economic indicators as well,he said while underlining challenges of inflation and a revival in investments.
Core sector growth… strong monsoon and healthy exports augur well for economic growth… I think there will be green shoots even in investment. We are confident that the measures taken by the RBI and our own measures at maintaining fiscal discipline will eventually bring about a moderation of inflation, he said. Going forward,he expressed hope of stability in the currency and financial markets along with lower inflation.
He also stressed that the fiscal deficit will be contained at 4.8 per cent of the GDP and said the disinvestment target of Rs 40,000 crore will be achieved. He added that there is no need to worry over first half fiscal deficit figures that touched 76 per cent of the full year target. He also said the rupee has by and large stabilised against the dollar,although,in his view,it is still a little over the appropriate exchange rate. “There is no such thing called appropriate exchange rate,but giving my personal view,it is slightly over the appropriate exchange-rate level,” he said.
The rupee closed at 61.74 against the dollar today.