Author: Paul Ploumis06 Mar 2014 Last updated at 00:14:57 GMT
MUMBAI (Scrap Monster) : Amidst all those storming critics on the over-regulation of gold import that created a crunch of stocks for Indian jewelers over the year, Govt. has successfully pulled down the current account deficit that has been haunting the economical growth of the country. As per reports of expert analysts, India’s CAD is reported to have been narrowed to four-year lows which have been acquired by reducing gold import through stringent RBI regulations. In a data released in Mumbai yesterday, CAD in October-December was found to be at the least when compared to 2010.
Looking at the narrowed CAD of the country, economists suggest that the gap is expected to widen in future once the Indian economy improves. Estimates show that a narrow decrease in CAD was evident throughout 2013 after imposing 10 % import duty on gold. The current account deficit in October 2013 was found to be $ 4.2 billion which followed to December. The CAD was found to be at $ 5.2 billion in the previous quarter. Thus, according to RBI, the year showed marginal decline of CAD. RBI reported a decline of 0.9 % of gross domestic product. The current account includes the extensive measure of trade, goods, tracking goods and investment income.
India had hiked the gold import duty thrice in 2013 that resulted in the fall of import, triggering of gold smuggling, shortage of stocks, subdue of economical growth and above all the abdication of India’s title of being the top gold consumer of the world. According to the chief economist at the Mumbai-based Crisil Ltd., Mr. Dharmakirthi Joshi, the drop of CAD cannot be considered bullish as once the economy rises, gold import will also zoom up, and consequently CAD would mount up again. He urged the Govt. to withdraw regulations on gold import.
Meanwhile, Indian Finance Minister, Mr. P. Chidambaram informed the media that the Govt. will be revisiting gold import curb only after the complete figure for CAD is released by the end of full-fiscal year on March. The targeted CAD is below $ 45 billion which stood at $ 88 billion last year. According to RBI, CAD declined to $ 31.1 billion from April to December last year, falling from $ 69.5 billion.