Current Account deficit down to $32 billion – Finance Minister .
Finance Minister P Chidambaram on April 26, 2014 said the government managed to bring the current account deficit (CAD) in 2013-14 down to $32 billion, or 1.7 per cent of gross domestic product (GDP), compared with the $45 billion estimated in the interim Budget in February and $35 billion projected towards the end of March. He added the fiscal deficit target of 4.6 per cent of GDP was also going to be met.
“We are completely satisfied that we will achieve the fiscal deficit target projected in the interim Budget. The news on CAD is, of course, extremely good. The CAD for the year that ended will be only $32 billion, against the previous year’s $88 billion,” he said.
Budget 2013-14 had projected fiscal deficit to be 4.8 per cent of GDP, a tad lower than 4.9 per cent the previous year. A lower CAD and fiscal deficit — a widening of both had put India at a risk of downgrade by rating agencies in the past few years — would provide comfort to the new finance minister when he presents the full Budget (likely in July) after formation of a government at the centre. Curbs on gold imports helped bring down CAD and the government might review the restrictions now.
“Once these two problems (CAD and fiscal deficit) are contained, you will find that both domestic and foreign investment will pick up going forward,” he added.