Prime Minister Narendra Modi holds key discussions on checking current account deficit
He met Finance Minister Arun Jaitley and RBI Governor Urjit Patel ahead of a meeting on Saturday to review the state of the economy.
Prime Minister Narendra Modi on Friday held discussions with Finance Minister Arun Jaitley, Finance Secretary Hasmukh Adhia, Reserve Bank of India Governor Urjit Patel, and other officials ahead of a key meeting on the state of the economy on Saturday, reported PTI.
In the meeting, the government decided to relax norms for overseas borrowing and impose restrictions on non-essential imports. These moves will help check the current account deficit as well as increase foreign exchange inflows, said Jaitley, without specifying which items would face import restrictions.
The current account deficit is the difference between the worth of a country’s imports and its exports. A higher deficit means the country buys more products from overseas than it ships out as exports.
“To address the issue of expanding current account deficit, the government will take necessary steps to cut down non-essential imports and increase exports,” said Jaitley. “The commodities of which imports will be cut down will be decided after consultations with concerned ministries and will be World Trade Organization-compliant.”
On Friday, the prices of petrol and diesel continued to rise due to the recent depreciation in the rupee’s value and a rise in international oil rates. While crude oil prices have been around the $80 per barrel mark, the rupee declined against the dollar this week, making imports costlier.
On September 10, Opposition parties staged a nationwide shutdown to protest against the rise in fuel prices and decline in rupee’s value. The Congress called for the bandh, and claimed to have the support of 21 parties.