PC unveils a slew of steps to cut deficit, more coming
The government unveiled several proposals Monday to narrow the current account deficit, including liberalising ECB guidelines and allowing public sector financial institutions to raise quasi-sovereign bonds to finance long-term infrastructure. Finance minister P. Chidambaram said these would bring in $11 billion this fiscal year, and help arrest the rupee’s fall.
He also promised to contain the deficit at $70 billion this fiscal, down from $88.2 billion in 2012-13. “If the CAD is contained at $70 billion, it will amount to 3.7 per cent of GDP (against 4.8 per cent in 2012-13),” he said.
The minister said the government will announce more measures to lower imports of gold and silver, demand for oil and import of non-essential commodities.
Interest rates on foreign currency non-resident accounts have been liberalised to attract more deposits. On quasi-sovereign bonds, Mr Chidambaram said IIFCL and PFC will raise $1.5 billion each, while IRFC will mobilise $1 billion for long-term infrastructure lending.
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