Current account deficit manageable: Montek

Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday said the rising current account deficit, though wider than expected, could be easily financed and thus, is not a cause for concern. Moreover, he downplayed fears of overheating of the Indian economy.

The current account deficit has risen three times to $13.7 billion as compared to the corresponding period in 2009.

“I don’t think so,” Ahluwalia said, when asked if the economy was overheating, which refers to increase in prices of goods and services due to lack of adequate supply. “I see strong signs (of) recovery. It is true that the current account deficit is little wider but it is easily finance-able,” he added.

Current account deficit, which represents flow of money out of the country barring capital movements, stood at $4.5 billion in the first quarter of previous financial year.

The deficit, which includes deficit in external trade of goods, services, besides net investment income, stood at 2.9 per cent of the gross domestic product (GDP) in 2009-10, and experts believe that it will increase a bit to 3 per cent of GDP this financial year.

Ahluwalia today also launched a website to invite suggestions and ideas from individuals for the formulation of the twelfth plan (2012-2017). The website charts various issues and seeks feedback. The approach paper for the Twelfth Plan, which might incorporate the various suggestions posted on the website, is expected to be ready by March 2012.

This is the first time a website has been dedicated to gather feedback from citizens to formulate a government policy document.

“We want ideas from the grassroots, so that the plan really caters to the goal of financial inclusion. We are now a market-based economy and its management cannot be dealt by the ministries alone,” said Ahluwalia.

He added that he would write to chief ministers of all state governments to encourage suggestions from every district.

“Till now, we have formulated plans by interacting with committees and state governments. What we get is filtered information. There is recognition of the need to capture the change taking place in the country, “said Pronab Sen, principal advisor in the Planning Commission.

Responses to different sectors have been divided between the members and each response will be worked on by around 35 personnel.