Rising crude oil remand, mounting gold imports and depreciation of local currency against dollar has pushed the current account deficit (CAD) to record high of 5.4 percent of GDP in the July-September quarter. Notwithstanding government steps to curb gold import (this is touted to be the main reason behind burgeoning CAD), fuel reforms (like cap on LPG cylinders, partial deregulation of diesel prices) the CAD figures remain alarming. At the helm of affairs in the Finance Ministry, Chidambaram faces an uphill task of narrowing the CAD.

By Reema Sharma/Ajeet Kumar