Finance minister P Chidambaram on Tuesday reiterated that India’s current account deficit (CAD) will be contained below $60 billion this fiscal as against an earlier estimate of $70 billion. The minister also said the government and markets are prepared for the anticipated phased withdrawal of the monetary stimulus by the US.
“We think we can peg it (CAD) at $ 60 billion or below. I am confident that we can do even slightly better than $60 billion,” a news agency quoted Chidambaram as saying in an interview to a TV channel. India’s current account deficit had reached an all-time high of $88.2 billion or 4.8% of GDP in 2012-13 mainly on account of huge imports of oil and gold.
Chidambaram also said that the country would be prepared to deal with any impact of the US Federal Reserve’s gradual stimulus withdrawal.
“We now know it (tapering of the stimulus) will happen…it will happen perhaps in January or February, markets and the government are now prepared for this, in the sense we know it will happen,.” he said. He also said the government will contain its fiscal deficit, improve the revenues, contain expenditure and take steps to prevent excessive speculations on the currency.
