September 15, 2018

Govt. To Increase Exports, Decrease Non-Essential Imports To Contain Widening Cad


Finance Minister ARUN JAITLEY said that in the midst of a broadening current account deficit (CAD), falling rupee and escalating crude oil prices, the government has decided to increase exports and reduce non-essential imports.

In a meeting presided over by PRIME MINISTER NARENDRA MODI, the government also decided to remove limitations on masala bonds and external commercial borrowings to check the CAD, which plunged for the first time in six quarters in April-June. Masala bonds are defined as rupee-dominated instruments through which Indian entities can raise funds by accessing overseas capital markets.

MR JAITLEY said, “To address the issue of expanding CAD, the government will take necessary steps to cut down non-essential imports and increase exports. The commodities of which imports will be cut down will be decided after consultations with the concerned ministries and will be WTO-compliant.”

MR JAITLEY said that the decision was intended to check the CAD and increase inflows of FOREX. The RBI Governor and officials of the Finance Ministry briefed the PM on the Indian economy.In the first quarter, CAD increased to $15.8 billion, compared to $15.0 billion in the corresponding period a year ago.

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