Minister shares information about current account deficit

India’s current account deficit (CAD) stands at USD 3.4 billion (0.6% of GDP) in Q4 of 2016-17, which was higher than USD 0.3 billion (0.1% of GDP) in Q4 of 2015-16, but narrowed from USD 8.0 billion (1.4% of GDP) in the preceding quarter. The above information was shared by Arjun Ram Meghwal, Minister of State for Finance, in the Rajya Sabha on Tuesday.
 
For 2016-17 full year, the current account deficit (CAD) narrowed down to 0.7% of the GDP from 1.1% of the GDP in 2015-16. The widening of the CAD in the fourth quarter of 2016-17 on a year-on-year basis was on account of a higher trade deficit (USD 29.7 billion) due to a larger increase in merchandise imports relative to exports. 
 
High increase in imports of petroleum, oil and lubricants (POL) and gold and silver imports led to a rise in imports in the last quarter of 2016-17. Despite the widening in Q4 of 2016-17, the CAD is low and within manageable limits. The government and the RBI closely monitor the emerging external economic situation, including CAD, and calibrate policies on an on-going basis.