“Increased Domestic Production of Oil, Coal & Restraining Gold Consumption can Contain CAD; India Continues to Remain a Desired Destination for FDI and FII – P. Chidambaram”

The Union Finance Minister, Mr. P. Chidambaram, while addressing the agenda of the meeting, ‘The Current Account Deficit- Implications and Measures to Contain the Deficit’ of the Parliamentary Consultative Committee of the Ministry of Finance said the present two major concerns are the extent of Current Account Deficit (CAD) and it’s financing. Therefore the only way to contain CAD than to draw from the reserves is by increasing the country’s domestic production of oil & coal and limiting the consumption of gold since we are heavily dependant on import of items like oil, coal and gold, for which we must introduce appropriate policies for long term measures.

For overcoming the situation, the Union Finance Minister stated that the government is keeping a track at the FDI caps to see whether the same is serving any purpose and will be re-examined if not. He further informed that despite the difficulties faced by the country, the Government was able to finance the CAD and also added that an amount of around US $ 3 billion has been deposited in the forex reserves in the year 2012-13. He was confident that the CAD will be again financed this year without taking anything from the reserves of the country and that efforts have been made to increase the productive activities in the country by reviving stalled projects. For this purpose the Ministry has compiled a list of about 215 stalled projects, where the banks have already funded more than Rs. 7 lakh crores.

The Minister observed that as the world economies are in recession including all European economies except Germany and where USA is showing some positive signs of revival, however, as far as India is concerned, Mr. P. Chidambaram said it continues to remain a desired destination for FDI and FII.