New Delhi: India's current account deficit (CAD) will be contained at USD 45 billion this financial year, well below the record high level of 2012-13, Finance Minister P Chidambaram said on Monday. "CAD that threatened to exceed last year's USD 88 billion will be contained at USD 45 billion," he said in the interim budget presented in Parliament.
The Finance Minister also said, "I am happy to inform the House that we expect to add about USD 15 billion to the foreign exchange reserves by the end of the financial year." In the first half (April-September) of 2013-14, CAD narrowed to USD 26.9 billion (3.1 per cent of GDP) from USD 37.9 billion (4.5 per cent of GDP) in the first half of 2012-13.
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. The government had increased customs duty on gold thrice in 2013 to 10 per cent and the RBI had imposed a series of curbs on inward shipments of the yellow metal.
Chidambaram also said India's exports are likely to touch USD 326 billion in 2013-14. Exports were about USD 304.5 billion in 2012-13. The aim, he said, "must be robust growth in exports and imports, both."