Comfortable Forex Reserves to Ease CAD Worries, says Jaitley

10/12/2014 06:36 AST

Finance Minister Arun Jaitley on Tuesday said that increased current account deficit (CAD) as recorded in the July-September was “not a cause for concern” as India’s forex reserves are at a comfortable level.

With country’s forex reserve at acomfortable and the Balance of payments under control, there was no cause for concern on the CAD front, Jaitley said in the Rajya Sabha. CAD, in the July-September quarter, rose to 2.1 per cent of GDP, from 1.7 per cent in first quarter.

The CAD is the net difference between inflows and outflows of foreign currencies.

India’s CAD narrowed down from 4.7 per cent in 2012-13 to 1.7 per cent in 2013-14 due to a lower trade deficit as a result of modest recovery in exports and a sharp fall in imports, particularly gold imports.

Regarding gold imports, Jaitley said, “If you put in too many restrictions, then the official gold import will come down and unofficial imports will go up.”

To another question, he said till November 27 of the current fiscal, foreign institutional investors and foreign portfolio investors have made Rs 1,84,757 crore net investments in the country.

During the first six months, investments made by FIIs and FPIs stood at Rs 1,44,053 crore of which Rs 82,810 crore came in the form of debt and the remaining in equity.


New Indian Express

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