India will fully finance CAD sans draw down on reserves: Mayaram

India will finance its current account deficit fully in the fiscal year ending March without drawing down on its reserves, and will also contain the fiscal deficit at 4.8 percent of GDP, Economic Affairs Secretary Arvind Mayaram said on Tuesday.

Mayaram added the government would not have to go beyond the finance ministry’s planned market borrowing for the year, and would be able to meet its budgeted revenue target.

[caption id=“attachment_931869” align=“alignleft” width=“380”]  Department of Economic Affairs, secretary, Arvind Mayaram. Image courtesy PIB[/caption]

Economic growth will pick up in the second half of the fiscal year, he said.

India’s current account deficit grew less than expected in the June quarter and is tipped to ease in coming months as a pick-up in exports and lower gold imports improve the trade balance, offering relief to the battered rupee.

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The current account deficit (CAD) for the three months through June was $21.8 billion, or 4.9 percent of gross domestic product, driven by sluggish exports and high gold imports in April and May before the government hiked tariffs on the metal to a record 10 percent.

Reuters