As per the Chief Economic Advisor Raghuram Rajan, the country’s Current Account Deficit (CAD) is likely to be around 4 percent of the gross domestic product (GDP) for the fourth quarter of FY13. The CAD, which represents the difference between the export and import of goods, services and transfers, widened to a record high of 6.7 percent in the third quarter of FY13 on the back of rising oil and gold imports and is expected to be around 5 percent for the previous financial year. Meanwhile, the high CAD is impacting the rupee value, which has hit 58.50/$ level recently.
India’s gold imports touched 162 tonnes in May, while in April, it were around 100-120 tonnes, higher than the average monthly import level of 70-80 tonnes. Further, the recently released World Gold Council (WGC) report highlighted that India’s gold imports in April-June quarter of 2013 may increase by 200 percent y-o-y to around 300-400 tonnes, which would be almost half the imports of whole of 2012. However, to curb the gold import, the government has been taking steps regularly, including raising import duty. Further, the RBI too had put in place regulations under which gold can only be imported on a consignment basis to meet the genuine demands of Jewellery exporters. It has also increased margin money to 100 Percent.
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