India's CAD to be less than 5 pc in FY13: Mayaram

Arvind Mayaram

India's current account deficit (CAD) for 2012-13 is likely to be less than 5% of the Gross Domestic Product (GDP), a top Finance Ministry official said today.

"I think final numbers of CAD for the entire last fiscal year (2012-13)is less than 5%," Department of Economic Affairs (DEA) Secretary Arvind Mayaram told CNBC TV18 in an interview.

Last week, the Reserve Bank of India in its annual monetary policy review for 2013-14 had pegged the country's CAD at around 5%.

CAD, which represents the difference between inflows and outflows of foreign currency, had touched a record high of 6.7% of GDP in the December quarter of the last fiscal.

On outcomes of his meetings with representatives of three global rating agencies-Fitch, Moody's and Standard and Poor's, Mayaram said: "We did not make a pitch for upgrade. We certainly engage with them for them to get the right information. And if they have any questions on that information then we provide clarifications on that."

He argued that "despite all the gloom and pessimism that we see, actually the fundamentals of Indian economy are very strong".

"With the very strong measures that has been taken by the finance minister in last 7-8 months, especially on fiscal consolidation, I think the question about credibility has also come down," Mayaram said.

Last month, representatives of Standard and Poor's and Fitch met Finance Ministry officials.

Global rating agency Moody's representative had met Finance Ministry officials earlier this week.

Earlier, Standard and Poor's and Fitch had threatened to downgrade India's credit rating.

Mayaram further said that listed companies must comply with Sebi's minimum public shareholding requirement as enough time has been given to them by the market regulator.

"I think Sebi chairman has very clearly stated that there should not be any relaxation...These norms should be met and the government fully supports Sebi chairman's view on this. I don't think there is going to be any relaxation and the companies have been given ample time," he said.

As per the norms stipulated by the Securities and Exchange Board of India (Sebi), privately promoted companies are expected to have a public shareholding at 25% by June 2013, while the same for the state-run listed companies has been relaxed to 10%, which has to be met by August 2013.