India may be able to contain its current account deficit (CAD) to $70 billion, about 3.7 per cent of GDP, in the current fiscal because of various steps taken by the government, Prime Minister’s Economic Advisory Council chairman C. Rangarajan said on Monday.

He also said that the country’s economic growth will be around 5.5 per cent in the 2013-14 fiscal.

“Reducing CAD from $88 billion (2012-13 fiscal) to $70 billion is possible because of various actions taken by the government... Gold imports falling by $10-12 billion itself will be a great relief,” Rangarajan said at an event in New Delhi.

India’s CAD — the gap between inflow and outgo of foreign exchange — widened to a record high of $88 billion or 4.8 per cent of the GDP for the fiscal ended March 31, from $78.2 billion in 2011-2012, about 4.2 per cent of the Gross Domestic Product.

Finance Minister P. Chidambaram had said recently that the government will make all efforts to contain fiscal deficit at 4.8 per cent, and CAD at 3.7 per cent of GDP, about $70 billion, in the 2013-14 financial year.

The government has increased duty on import of gold and silver to 10 per cent in a bid to contain the forex outflow, and also announced a slew of measures including easier overseas borrowing norms to fetch an additional $11 billion this fiscal to check the burgeoning CAD.

As for the steps to increase capital inflows, financial bodies — IRFC, PFC and IIFCL — will be permitted to raise $4 billion collectively through quasi-sovereign bonds for the infrastructure sector.

Chidambaram had also said that PSU oil companies would be permitted to raise additional External Commercial Borrowings (ECBs) to the tune of $4 billion.

He had further said the liberalisation of the ECB norms and non-resident deposit schemes (NRE/FCNR) would fetch $2 billion and $1 billion respectively.

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