Planning Commission Deputy Chairman Montek Singh Ahluwalia on Wednesday said the current account deficit will be “significantly below” three per cent of the GDP this fiscal.

“It should be closer to 2.5 to 2.7 per cent with India continuing to have strong fundamentals,” he told mediapersons on the sidelines of a lecture meet at Indian School of Business.

The current account deficit is the difference between inflow and outflow of foreign exchange,

He was also optimistic that fiscal deficit would not cross 4.8 per cent of the GDP.

Growth outlook

He felt the second half of the fiscal will be better than the first half in terms of growth.

“The revival may not be that robust, but India is poised to resume a path of high growth. I think the revival in the economic growth will be evident in the next six months,” he said, without giving any numbers.

Ahluwalia said next fiscal could see the first signs of strong improvement, with many projects and policies in the pipeline.

India’s growth target is eight per cent for the next fiscal.

The country’s gross domestic product (GDP) will expand by over six per cent in the next financial year, which will primarily be triggered by the policies of the new Government, he said.

Infra focus

There is a global willingness to invest in India, according to him. However, the Government focus should be on infrastructure development, such as power and roads.

“A lot will depend on how innovatively we use the resources we have,” he pointed out.

“With a 2.5 per cent CAD, the domestic savings will be 34.5 per cent. These are not difficult targets for us to achieve,” he said.

The plan panel was in the process of setting up a system to compute the ease of doing business in every State. States that rank higher in this index are likely to get more investments.

(This article was published on November 27, 2013)
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