The Hindu Business Line : Invisible receipts for April-June at $8.17 b

A 66 per cent increase in invisible receipts helped the country's current account end the April-June 2004 quarter with a surplus of $ 1.9 billion as compared to a deficit of $ 636 million in the year-ago period.

Invisible receipts in the balance of payments data released by the Reserve Bank of India for the April-June 2004 quarter have risen to $ 8.17 billion as compared to $ 4.92 billion in the corresponding quarter year ago.

According to the RBI, invisibles receipts were buoyant mainly because of remittances from expatriate Indians, software exports and travel earnings. A sharp rise in invisibles payments was on account of growth in outbound tourist traffic, transportation and insurance payments associated with merchandise trade and expanding demand for imports of business services.

"India emerged as a favoured travel destination with international tourist traffic rising by 26.8 per cent in the quarter. Software exports were resilient during April-June 2004," the RBI said.

Private transfers, essentially comprising remittances from Indians working abroad constituted about 30 per cent of gross invisible receipts.

Trade deficit widened further to $ 6.3 billion from $ 5.56 billion in the year-ago period. This, according to the RBI, was the highest in any quarter so far. This was because imports far outstripped exports. Imports during the April-June 2004 quarter were at $ 23.12 billion ($18.7 billion) and exports were $ 16.84 billion ($13.151 billion).

Capital account for the quarter stood at $ 5.6 billion as compared to $ 6.1 billion. A year-on-year comparison for the April-June quarter shows that during Q1 of 2004/2005 foreign direct investment (FDI), external commercial borrowings, other banking capital and short-term credits were higher from the year-ago period.

FDI during April-June 2004 quarter was $ 1.2 billion ($ 0.7 billion). ECBs stood at $ 1.2 billion ($ 0.4 billion). NRI deposits registered net outflows responding to alignment of interest rates on these deposits with rates of return in the international market.

With foreign exchange reserves of $ 119.5 billion at the end of June 2004, India held the first largest stock of reserves among the emerging market economies and sixth largest in the world.

According to the RBI data, merchandise imports surged, reflecting the rising crude oil prices and strong demand for raw materials, intermediates and finished products. Merchandise exports was robust and well above the target of 16 per cent in dollar terms.