The gold imports last month were $6.78 billion. The decrease in imports reduced the trade deficit to $10 billion in the first month of the current fiscal (2014-15).
The current account deficit (CAD) reached a historic high of 4.8 per cent of GDP in 2012-13 and it was due to rising imports of gold and petroleum products.
A high CAD is not good for economy as it puts pressure on the rupee, which in makes imports expensive and leads to inflation of fuel prices.
Finance Minister P. Chidambaram recently said that the Congress-led UPA government has managed to bring down CAD to $32 billion in 2013-14 as against $88 billion during 2012-13.
He had said that in 2012-13, the CAD was at 4.7 per cent of GDP and in 2013-14 it will be only 1.7 per cent. It is to be noted that India is the largest importer of gold.
via Business - Google News http://ift.tt/RDo3F5
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