‘Higher CAD on falling rupee not a concern’

NEW DELHI: India may report a higher current account deficit (CAD) this year on account of a falling rupee but this is not a cause of worry, said a senior government official who did not wish to be identified.

The government will also not place a restriction on imports to benefit a few industrialists, the official said.

“There will be short-term pressure on CAD but India has adequate foreign exchange reserves to tide over this,” the official said, adding that the government is confident of adhering to the fiscal deficit target for 2018-19.

“CAD won’t be as good as last year but with oil prices stabilising, the situation will not be very bad,” he said.

The rupee has been one of the worst performers among Asian currencies, having depreciated by around 9% since the beginning of the year and crossing the psychological level of 70 to a dollar earlier this month. The rupee last saw similar levels in August 2013.

Economists are expecting CAD to be around 2.6-3% of gross domestic product (GDP) in 2018-19. It was 1.9% in 2017-18 as against a peak of 4.7% in 2012-13.

The government on Tuesday exempted levy of customs duty and integrated goods and services tax (GST) on all items imported for providing relief in the flood ravaged state of Kerala.

This will provide a relief for all items that are being sent by people from across the world to help people in Kerala displaced by floods.