After close to 5 per cent rise in current account deficit (CAD) in Apr-June period which was mainly on the back of a rise in gold imports, the finance ministry expects CAD to come down significantly in the second quarter as a clamp down in gold has started showing results.
A 3.7 per cent CAD redline will be adhered to at the end of current fiscal, Economic Affairs Secretary Arvind Mayaram said.
"The elevated level of CAD at 4.9 per cent in June quarter is mainly due to gold imports which would be restricted below 800 tonnes this year. The imports were 845 tonnes last year. We would certainly hope that CAD would be less than $70 billion. The CAD will be fully and safely financed without any recourse to dipping into reserves," he said.
However, gold imports into India, the world's biggest buyer of the yellow metal, has risen to 7.24 tonnes in over three weeks in September, up from 3.38 tonnes in August, the finance ministry said in a statement on Tuesday.
The September figure was way below 162 tonnes recorded in May, which prompted the government to raise import duty to 10 per cent and tie exports to domestic consumption, under the 80/20 import rule.
