CAD to come down to 2% of GDP, says Rangarajan

India's Current Account Deficit (CAD) is expected to be around two per cent of GDP during the current fiscal on the back of slackening imports and increased shipments, Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan has said.

"Several things have happened. Exports have picked up. Imports have come down not only in relation to gold but also in relation to oil. The CAD would certainly come down below two per cent or around two per cent of the GDP," Rangarajan said during a recent visit.

Finance Minister P Chidambaram had said while tabling the interim budget that CAD will be contained at $45 billion this financial year, well below the $88 billion level in 2012-13.

In the first half (April-September) of 2013-14, CAD narrowed to $26.9 billion (3.1 per cent of GDP) from $37.9 billion (4.5 per cent) in the same period last fiscal.

Both the government and the Reserve Bank of India had taken steps to bring down gold imports, one of the major causes for the widening of the CAD in 2012-13.

"Certainly, the restrictions imposed on gold have helped in containing the import of gold. Therefore, any further changes in policy would depend up on the stability of Balance of Payments," Rangarajan said.