PM panel sees fall in gold imports this fiscal

The Prime Minister’s Economic Advisory Council (PMAEC) said it expects gold imports to come down this fiscal, which could reduce the current account deficit (CAD) to 3.5 per cent of GDP

.

“We do expect CAD in the current year, that is 2012-13, to come down to something like 3.5 per cent from high level of 4.2 per cent of GDP last year,” PMEAC Chairman C Rangarajan said.

India’s CAD had touched a record high of 4.2 per cent of GDP in 2011-12, on the back of a wider trade gap and lower capital inflows. Rangarajan said capital flows should be encouraged into the country in the short-term.

In fiscal 2011-12, India’s gold imports stood at $60 billion and the quantum of import was 1,067 tonne. In April-June quarter of current fiscal, however, gold imports had contracted by 18.4 per cent year-on-year to Rs 71,912 crore ($13 billion).

Rangarajan said, “We should encourage capital inflows so that financing of the current account deficit does not become difficult.”