The Hindu Business Line : Current account shows $1.2 b deficit in April-June period

THE country's current account has registered a deficit of $1.2 billion during the April-June 2003 period, reversing a trend of surplus positions for six consecutive quarters since the third quarter of 2001-02. During this period, quarterly current account surplus ranged between $0.4 billion and $1.9 billion.

According to the balance of payment figures released by the Reserve Bank of India today, the deficit in the current account is due to the increase in imports over exports. The trade deficit on payment basis increased to $5.9 billion as against $2.8 billion in the corresponding period of the previous year, mainly due to higher imports.

The merchandise exports during the period amounted to $13.5 billion as against $12.1 billion of the corresponding period of the previous year. Imports during the same period stood at $19.4 billion as compared with $14.8 billion registering a 30.8 per cent growth in imports.

Private transfers (net), comprising mainly remittances and local withdrawal from NRI deposits, were higher at $4.2 billion than $3.5 billion in April-June 2002.

Net position of the invisibles account registered a surplus of $4.7 billion as against a surplus of $3.2 billion during April-June 2002.

The overall balance comprising current account deficit ($1.2 billion), capital account surplus ($6.1 billion) and errors and omissions ($0.3 billion) showed a higher net inflow of $5.2 billion than an inflow of $1.7 billion in April-June 2002.

According to the RBI, the BoP data for the April-March 2002-03 period has been revised primarily due to revision in the quarterly data for January-March 2003. This revision was necessitated as final figures were received with respect to exports and imports, private transfers and investment income on the current account and NRI deposits and ECB in the capital account.

The RBI data showed a net accretion to foreign exchange reserves excluding valuation change of $5.2 billion as compared with $1.7 billion during April-June 2002. Including valuation change ($1.5 billion) net accretion to foreign exchange reserves stood at $6.7 billion.

Net inflows under foreign investment comprising foreign direct investment (FDI) and portfolio investment amounted to $2.8 billion during April-June 2003 as against $1.1 billion during the corresponding period of the previous year. This was mainly on account of higher inflows under portfolio investment.

FDI inflows to India (net) under the extended coverage (including equity capital, reinvested earnings and other capital of FDI companies) at $0.7 billion were lower than that of $1.3 billion in April-June 2002.

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