Reducing trade deficit to $155 bn this fiscal will be good: FM

Says it is important that the trade deficit must be reduced and the best way to that is increasing exports

The trade balance between April and October was reported at $90.7 billion and if the government could contain the trade deficit to $150-155 billion this fiscal, it will be good for growth, said finance minister P Chidambaram.

Speaking in an interactive session with exporters here, he said he would be happy if the current account deficit is controlled below $56 billion as the Reserve Bank of India governor had pegged recently.

"Last year, for the full year, the trade balance was $190 billion. This year from April to October we have just crossed $90 billion, in a period of seven months. We still have five months to go. The second half is always better economic activity. As long as we are able to contain the trade deficit to $150-155 billion, I think we are still on the good ground," he said.

It is important that the trade deficit must be reduced and the best way to that is increasing exports, he said. The country saw three or four months of good growth in exports and in Oct, these grew 13.5 per cent and in a period from Apr to Oct, grew 6.3 %

"That is a good sign. Month after month exports have picked up. The reasons, of course, is the more attractive exchange rate. We are trying to facilitate exports and the RBI is also extending support," he said.While the domestic savings is the one big pillar of the country's economy, with the savings rate at 30.8 per cent during the worst year, the second big pillar is exports, he said.