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India’s account deficit not alarming: Jaitley

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Union Minister for Finance, Corporate Affairs, and Information and Broadcasting Arun Jaitley

 

 Union Minister for Finance, Corporate Affairs, and Information and Broadcasting Arun Jaitley
Union Minister for Finance, Corporate Affairs, and Information and Broadcasting Arun Jaitley

Finance Minister Arun Jaitley said  that India’s current account deficit (CAD) was not alarming and it was under control.

“The CAD figure of 2.1 percent (of GDP) is not alarming. The figure is under control. There are ways of curtailing it and bringing it down further,” he said in the Rajya Sabha.

He added that huge quantity of gold import was adding to the CAD.

India’s CAD widened to $10.1 billion for the quarter ended Sep 30, 2014, data released by Reserve Bank of India (RBI) showed Monday.

According to the central bank, the net difference between inflows and outflows of foreign currencies, also known as the current account, showed a deficit that widened by 2.1 percent of the gross domestic product from 1.2 percent in the corresponding quarter last year.

Jaitley added that foreign exchange was coming to the country through all channels.

“Addition to the reserve is taking place; it indicates a comfortable situation. In a given situation, if there is a negative slowdown in the economy or if the products become non-competitive compared to Chinese products, your exports out of the country can slow down,” he said.

“But overall on account of several other things, like FII investment, if foreign exchange reserves in the country are continuing to be added and therefore the kind of situation of concern does not exist at all.”