New Delhi: Government has taken a slew of initiatives to boost exports and reduce imports to lower trade deficit and thereby Current Account Deficit (CAD), Parliament was informed on Tuesday.
The country's CAD stood at 5.4 percent of GDP during April-December period of financial year 2012-13 amounting to USD 72 billion.
In 2011-12, CAD was 4.2 percent of GDP amounting to USD 78.2 billion and in 2010-11, it was 2.8 percent of GDP at USD 48.1 billion, the Minister of State for Finance Namo Narain Meena said in a written reply to Rajya Sabha.
In reply to a question on what measures were taken by the government to reduce CAD, the Minister said though no target has been set for CAD but the government intends to reduce it from current levels.
"The government has taken a slew of initiatives to boost exports and reduce imports to lower trade deficit and thereby CAD, and also to encourage capital flows to facilitate the financing of CAD," Meena said.
The current account deficit (CAD) represents the difference between inflow and outflow of foreign currency.
Meena said, in December, the government announced measures such as incentives for export promotion. In January, RBI announced a USD-Rupee swap facility to support incremental pre-shipment export credit in foreign currency.
He further said the Annual Supplement 2013-14 to the Foreign Trade Policy 2009-14 released in April had announced number of measures to boost exports.
Measures to boost exports assume significance in view of the widening CAD which touched a historic high of 6.7 percent of the GDP in quarter ending December 31, 2012.
Also, steps have been taken to reduce imports including enhanced customs duty on gold and platinum from 4 to 6 percent.
Moreover, the government has proposed to provide a link between the Gold ETF (Exchange Traded Fund) and the Gold Deposit Scheme with the objective to unfreeze or release a part of the gold physically held by mutual funds, he said.
"This would bring the gold lying in stock into circulation and will partly meet the requirements of the gems and jewellery trade. It is hoped that these measures would lead to moderation in the quantity of gold imported into the country," he said.
Meena also said the government has revised diesel prices and capped subsidised LPG cylinders to consumers to contain fiscal burden of subsidies.
"On January 17, 2013, oil marketing companies (OMCs) were permitted to raise diesel prices in small measures periodically. These measures are expected to contain demand for oil imports," the minister said.