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India’s Current Account Deficit: The current account deficit (CAD) of the country has come down. It came down to one per cent of gross domestic product (GDP) or $8.3 billion in the second quarter of the current fiscal year. The current account deficit narrowed due to a reduction in the merchandise trade deficit and an increase in service exports.
What was the loss in the same quarter a year ago?
According to data released by the Reserve Bank on Tuesday, the current account deficit (CAD) in the second quarter (July-September) of the last financial year 2022-23 was 3.8 per cent or $30.9 billion. Let us tell you that CAD tells the difference between the money sent abroad and the amount received in the country from abroad. It was 1.1 percent of GDP or $9.2 billion in the first April-June quarter of the current fiscal year.
According to data released on India’s balance of payments position during the second quarter of the current fiscal year, “CAD depreciated in the July-September quarter of the current fiscal year. This is due to a reduction in the merchandise trade deficit (difference between merchandise exports and imports). It was $61 billion in the second quarter of 2023-24, compared to $78.3 billion in the second quarter of 2022-23.
Which exports increase?
According to Reserve Bank data, services exports rose 4.2 percent year-on-year due to growth in software exports, trade and passenger services. Net service receipts increased quarter-on-quarter as well as year-on-year. Due to a reduction in the merchandise trade deficit, the CAD declined to one percent in the first half of the current fiscal from 2.9 percent in the same period a year ago. According to the data, net withdrawals from the primary income account rose to $12.2 billion during the July-September quarter from $11.8 billion in the same period a year ago. It mainly refers to payment of investment income.
The companies invested 300 million dollars
At the financial accounting level, as net foreign direct investment, companies based in India have invested $300 million. While a year ago, in the second quarter of 2022-23, there was an inflow of $ 6.2 billion under this item.