Centre to further liberalise FDI norms

After a clamp down on gold, the government is looking for some more import compression, specially of luxury items or goods that can be produced locally. The move is intended to bring down exorbitantly high trade and current account deficits.

So far, the government has been mainly focused on reining in gold imports to bridge the gap in current account and has been focused around gold imports. But, now imports such as electronics and coal are also being targeted as they can be produced indigenously.

"There's no rocket science in manufacturing basic electronic hardware ... So we can manufacture electronic hardware goods here, like-wise import of non-essential items can be compressed. Coal is essential but we can produce it locally," Finance Minister P Chidambaram said on Wednesday.

On completion of one year in office, the minister said that one of the challenging tasks for him has been containing the widened fiscal deficit but promised that despite a sharp fall in rupee he would adhere to the red line of 4.8 per cent on the deficit in the financial year ending March 2014. He also expressed confidence that the present rate of foreign inflows will add at least $80 billion to the exchequer helping the government reduce its current account gap.

Chidambaram’s comments lifted the falling rupee to 60.77 per dollar from a low of 61.17 earlier on Wednesday.