Terming the widening
current account deficit (CAD) as a "major concern",
Reserve Bank Deputy Governor H R Khan on Tuesday called for special efforts to drive up exports so that this will not deteriorate further.
"We are a current account-deficit country and this is a major concern," Khan told an Engineering Export Promotion Council gathering on Tuesday evening.
"We are a balance of payments-stressed country. We have to promote exports to see that this is not going out of hand," he added.
Despite galloping merchandise exports this fiscal, the current account deficit has been on an upward spiral on rising oil imports, whose price has been on the rise coupled with a falling rupee. Last year the CAD stood at 2.6 per cent of the GDP and it is expected to be a tad more than that this fiscal.
The Commerce Ministry on Tuesday reported a robust 36.3 per cent rise in September exports while the import number rose 17.2 per cent to $24.8 billion and $34.5 billion, respectively, leaving a trade deficit of $9.7 billion.
The government has set target of $300 billion from exports this fiscal.
During H1, exports grew by 52 per cent to $160 billion from $105.2 billion in the same period last year, while imports expanded by 32.4 per cent to $233.5 billion, leaving a trade gap of $73.4 billion for the half-year.
Oil imports grew by 14.62 per cent to $9.2 billion in September, while non-oil imports rose by 18.17 per cent to $25.3 billion in the reporting. .
During the April-September period, oil imports grew by 42.39 per cent to $70.34 billion from $49.4 billion in the year-ago period. Non-oil imports were valued at $163.1 billion, an increase of 28.52 per cent from $126.95 billion.
Khan also termed the $318-billion forex reserves as "borrowed money" kept for times of "extreme distress".
Improving exports, he said, will allow the country a greater flexibility for its imports which will in turn give access to the best of goods and services.
On the trade payment issue with Iran, Khan said, "to all those sanctions-compliant exports, we are trying to provide a rupee window. So some money in the rupee account will be available with two three domestic banks and it is going to be available shortly."
Last December, the RBI had stopped oil payments in dollar payments to Iran due to sanctions by the US. Since then payments have been made over a lengthy period and so far no lasting solution has been worked out as yet.
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