Govt sets up panel to examine non-essential goods import
The committee to suggest steps to contain inward shipments of non-essential goods
New Delhi: Worried over widening trade and current account deficit, the government has constituted a committee to examine imports and suggest steps to contain inward shipments of non-essential goods.
The committee will be headed by Rajat Bhargav, joint secretary (budget) in the finance ministry, an official said. “It will submit its report in about two weeks," the official said.
Current account deficit (CAD) occurs when total imports of goods, services and transfers are higher than exports, reflecting outgo of foreign exchange. The CAD had hit a record high of 4.7% in 2012-13 fiscal as rising oil and gold import widened the trade gap. Both the Reserve Bank of India (RBI) as well as the government have taken a slew of steps to curtail gold demand.
Besides, the oil bill, which stood at $140 billion in 2011-12, will come down only if crude prices go down by 10-12% and the rupee is constant. India imports over 70% of its oil demand, a big drain on forex. Although gold and silver imports dipped to $2.45 billion in June from $8.4 billion in the previous month, the overall imports grew by 22.8% as compared to June 2012.
Trade deficit had widened to 7-month high of $20.1 billion in May. Oil imports in June grew by 13.74% to $12.76 billion. India’s full-year exports fell for the first time in three years with a dip of 1.8% to $300.6 billion in 2012-13, taking the country’s trade deficit to a record high level of $191 billion.
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