Reduction in CAD to be slow initially: PM

Govt will take all steps to ensure that foreign inflows remain strong for the next two years

After india's Current Account Deficit (CAD) touched a record 6.7% of GDP in third quarter,  Prime Minister Manmohan Singh pegged it at 5% of GDP in 2012-13 and projected only gradual reduction initially thereafter.

"In the meantime, we have to accept that our exports will be weak and our CAD higher than it should be," he said while inaugurating annual general meeting of CII.

He said his government will take all steps to ensure that foreign inflows remain strong for the next two years.

Singh said the government is reviewing the FDI policy comprehensively to assess its liberalisation further.

On domestic side, the government, he said is working to resolve coal and gas linkage problems for power sector.

"I hope we will see results in the next three weeks," he said.

The prime minister acknowledged that corruption is a problem, bureaucratic inertia is a problem and managing coalitions is not esay.

However, then these are not new problems and were there when the economy was growing at eight%, he added.