-India’s current account surplus stood at $6.6 billion, equivalent to 0.9% of GDP in Q1FY22
-Govt to issue maiden Sovereign Green Bonds of Rs 16,000 crore as part of its borrowing programme for H2FY23
-With the revision, a three-year time deposit with post offices would earn 5.8% from the existing 5.5%
Mumbai, NFAPost: India’s current account deficit, a key indicator of the balance of payment position, widened to 2.8 per cent of GDP at $23.9 billion in the first quarter of the current financial year, mainly on account of a higher trade deficit.
As per the data released by the Reserve Bank on India’s Balance of Payments during the First Quarter (April-June) of 2022-23, the current account balance recorded a deficit of $23.9 billion (2.8% of GDP) in the first quarter, up from $13.4 billion (1.5% of GDP) in January-March period of the last fiscal.
The CAD stood at $13.4 billion, or 1.5% of GDP, in the preceding January-March quarter, while there had been a surplus of $6.6 billion, or 0.9% of GDP, in the same quarter a year earlier, the release showed.
“Underlying the current account deficit in Q1:2022-23 was the widening of the merchandise trade deficit to $68.6 billion from $54.5 billion in Q4:2021-22 and an increase in net outgo of investment income payments,” the RBI said.
It also said net services receipts increased, both sequentially and on a year-on-year (y-o-y) basis, on the back of rising exports of computer and business services.
Private transfer receipts, mainly representing remittances by Indians employed overseas, rose 22.6% to $25.6 billion from a year earlier, the RBI said.
The country’s balance of payments recorded a surplus of $4.6 billion compared to a deficit of $16 billion in the preceding quarter and a surplus of $31.9 billion in the same quarter a year earlier.
India’s merchandise trade deficit in August widened to $27.98 billion from $11.71 billion a year earlier, revised data released by the government earlier this month showed.
Another key reason for the rise in the CAD was an increase in net outgoing investment income payments, which increased to $9.3 billion from $7.5 billion a year ago, the release said.
“CAD will certainly widen further despite the moderation in crude oil prices,” said Rupa Rege Nitsure, chief economist at L&T Financial Holdings.
“India can attract more capital inflows if and only if it shows an improvement in growth prospects. Going by the underlying trends, India’s CAD may be 3.5-3.7% of GDP in FY23,” she added.
Govt lowers borrowing target for FY23; to borrow Rs 5.92 trillion in H2
A day after doling out Rs 44,762 crore for free ration to poor, the government cut its market borrowing target for the current fiscal by Rs 10,000 crore in signs of buoyant tax collections.
In a statement, the finance ministry said the government will do total borrowing of Rs 5.92 trillion during October-March period of the current fiscal, including from issuance of its maiden Sovereign Green Bonds of Rs 16,000 crore.
The government had in Budget for 2022-23 projected a gross market borrowing of Rs 14.31 trillion. Of this, the government decided to borrow Rs 14.21 trillion during 2022-23.
“Accordingly, the balance amount of Rs 5.92 trillion (41.7 per cent of Rs 14.21 trillion) is planned to be borrowed in the second half of the fiscal year 2022-23 through dated securities, including Rs 16,000 crore through issuance of Sovereign Green Bonds (SGrBs) as per the announcement made in the Union Budget 2022-23,” it said.
The government will continue to exercise greenshoe option to retain an additional subscription of up to Rs 2,000 crore against each of the securities indicated in the auction notification.
The amount raised through this option will be limited to 3 to 5 per cent of the gross issuance for second half and within the gross borrowing limit for the 2022-23.
The gross direct tax collections till September 17 grew 30 per cent to over Rs 8.36 trillion.
Govt hikes Q3 interest rates on some small savings schemes by up to 30 bps
The government raised rates on some small savings schemes by up to 30 basis points (bps) in line with the hardening interest rate in the economy.
With the revision, a three-year time deposit with post offices would earn 5.8 per cent from the existing 5.5 per cent, an increase of 30 basis points for the third quarter of the current financial year.
Senior Citizen Savings scheme will earn 20 basis points more to 7.6 per cent from the existing rate of 7.4 per cent during the October-December period, a finance ministry notification said.
With regard to Kisan Credit Card, the government has revised both tenure and interest rates.
The Reserve Bank since May has raised the benchmark lending rate by 140 basis points, prompting banks to raise interest rates on deposits as well.
Agencies
