Confident of containing CAD below $60 bn: Chidambaram

Updated - May 26, 2016 08:01 am IST

Published - November 05, 2013 04:58 pm IST - New Delhi

Finance Minister P Chidambaram

Finance Minister P Chidambaram

Finance Minister P Chidambaram on Tuesday exuded confidence that India’s current account deficit (CAD) will be contained below $60 billion this financial year as against an earlier estimate of $70 billion.

“I am confident that we can do even slightly better than $60 billion,” he told CNBC Awaaz.

The CAD, the difference between the inflow and outflow of foreign exchange, had touched an all-time high of $88.2 billion, or 4.8 per cent of GDP, in the last fiscal.

The deficit for April-June was at $21.8 billion or 4.9 per cent of GDP.

High gold imports was one of the main reasons that pushed CAD to a record high in the previous financial year.

However, various curbs put in by both RBI and the Centre had helped in containing gold imports this fiscal.

On impact of the U.S. Federal Reserve’s gradual stimulus withdrawal, Mr Chidambaram said the tapering will happen, but both the markets as well as the government are prepared to deal with it.

“We now know it (tapering) will happen...it will happen perhaps in January or February, today they say it will happen in March...Market and government are now prepared for this, in the sense we know it will happen...

“Therefore, we need to strengthen the fundamentals of the economy, what the (RBI) Governor said bullet proof balance sheet, which means we will contain CAD, we will contain fiscal deficit, improve the revenues, contain expenditure, take steps to prevent excessive speculations on the currency...,” he said.

The Finance Minister further said number of measures are being taken so that when tapering happens, “markets won’t be taken by surprise, we won’t be taken by surprise and whatever impact it will be a minimal impact”.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.