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The government today said it has taken several steps to narrow the current account deficit (CAD), which touched a record high of 4.8% of GDP in 2012-13 mainly due to high petroleum product and gold imports.
In a written reply in the Rajya Sabha, Minister of State for Finance Namo Narain Meena said the high CAD mainly reflected widening of the trade deficit on account of subdued external demand and relatively inelastic imports of petroleum, oil, lubricants, gold, silver and lower invisible surplus.
"The government has taken a slew of initiatives to boost exports and reduce imports to lower trade deficit and thereby CAD, and also to encourage capital flows to facilitate the financing of CAD," he said.
In absolute terms, the CAD in 2012-13 was $88.2 billion, compared with $78.2 billion in the previous financial year.
Measures to increase exports include extension of the interest subvention scheme, widening of the incremental exports incentivisation scheme and dollar-rupee swap facility.
The government also decided to increase the rate of interest subvention from 2% to 3% to benefit exporters in the small and medium enterprises segment and most labour-intensive sectors.
To reduce imports, duty on gold imports has been increased to 8% and inward shipments of the metal have been linked to their exports. The government has also revised diesel prices and capped subsidised LPG cylinders to contain the subsidy bill.
To another query, Meena said several steps have been taken to revive growth in the economy, including setting up of the Cabinet Committee on Investment to speed up project implementation, liberalisation of FDI norms and new gas pricing guidelines.
Economic growth slowed to 5% in 2012-13 as against 6.2% in the previous fiscal.
