Press Esc to close
Monday 28 July 2014
News updated at 7:52 PM IST
Weather
Max: 0°C
Min : 0°C
In Bangalore
Sunny day

CAD to fall below 3.8% this fiscal, says Montek

New Delhi, October 20, 2013, PTI

Adds stress on rupee to be much less

Montek Singh Ahluwalia

Current Account Deficit (CAD) is likely to be lower than the projection of 3.8 per cent of the GDP and India will be in a better position to neutralise the impact of the tapering of monetary stimulus by the US Fed, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said.

“The bottom line on CAD is that news is very good. It will be lower than 3.8 per cent,” Ahluwalia said.

During 2012-13, the CAD was at an all-time high of 4.8 per cent of GDP or $88.2 billion. The government proposes to bring it down to $70 billion or 3.8 per cent of the GDP.


Elaborating further, Ahluwalia said, “Taper is delayed. Secondly, the CAD looks good. By the time taper happens, we are going to look in much better shape.. now rupee has come to a much more maintainable position. So the threat on the rupee will be much less as and when the taper happens. So we will be in a better situation (next year).”

Tapering refers to gradual withdrawal of monetary stimulus by the US Federal Reserve. The reversal of the easy money policy by the US is expected to impact the global markets as well as the economy.

Asked about the Planning Commission Member Saumitra Chaudhuri’s projections that CAD will be 2.5 per cent or range between $40-45 billion, Ahluwalia said, “It is not the Planning Commission’s estimate. This is his personal estimates.”

However, supporting Chaudhuri’s estimates, he said, “If you view the growth grooming because of agriculture and (its) impact on non-agriculture demand which is not very import-intensive, then current account deficit may be lower.”

Elaborating further, he said, “The Finance Ministry made this projection (of CAD) six months ago...When the Finance Ministry made its projection, may be, it had a higher assumption of growth. The problem is that growth is low. The imports are affected because of growth.”

During the first quarter (April-June) this fiscal, the Indian economy grew at 4.4 per cent lower than 4.8 per cent in the previous (January-March) quarter. The economy has grown at a decade low rate of 5 per cent last fiscal. The government expects the growth to range between 5 and 5.5 per cent this fiscal.

Go to Top

Photo Gallery
Bollywood music director Anu Malik, actor Sonam Kapoor, filmmaker Farah Khan and Pakistani...

Bollywood music director Anu Malik, actor Sonam Kapoor, filmmaker Farah Khan and Pakistani...

India shooter Vijay Kumar at Barry Buddon Shooting Centre in

India shooter Vijay Kumar at Barry Buddon Shooting Centre in

Muslim women offer namaz in Coimbatore on Monday during...

Muslim women offer namaz in Coimbatore on Monday during...

India gold medallist Rahi Sarnobatat and silver medallist Anisa Sayyed pose for...

India gold medallist Rahi Sarnobatat and silver medallist Anisa Sayyed pose for...

Ned McKendry of Australia is seen underwater as he...

Ned McKendry of Australia is seen underwater as he...

The South African rugby sevens team celebrate with...

The South African rugby sevens team celebrate with...

ndia's Sumit Sangwan, right, lands a right hook on...

ndia's Sumit Sangwan, right, lands a right hook on...

Sathish Sivalingam of India kiss the medal after...

Sathish Sivalingam of India kiss the medal after...

Ravi Katulu of India wins silver(left), Sathish Sivaling...l

Ravi Katulu of India wins silver(left), Sathish Sivaling...l

Gold Medallist India's Abhinav Bindra being welcomed by his...

Gold Medallist India's Abhinav Bindra being welcomed by his...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bangalore - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523