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FM takes stock of eco situation as rupee slips below 62 mark

The three hour long meeting was attended by Secretaries of departments of Revenue, Expenditure, Financial services and Disinvestment

Press Trust of India  |  New Delhi 

P Chidambaram
P Chidambaram

With the rupee crossing 62 against the dollar, Finance Minister P Chidambaram today met senior officials of various departments to take stock of the current economic situation and deliberated on steps to improve it.

The three hour long meeting was attended by Secretaries of departments of Revenue, Expenditure, Financial services and Disinvestment.

Sources said the Finance Minister took stock of the functioning of various department and sought suggestions from officials for improving the economic situation.

The agenda for next three months was discussed, another source said.

The meeting comes in the backdrop of rupee touching an all time low of 62.82 to a dollar and the stock markets too witnessing a decline.

"It was a performance assessment and way forward," a source said.

The Minister would be meeting the Department of Economic Affairs tomorrow.

To restrict the outflow of foreign currency, the RBI had on August 14 announced stern measures, including curbs on Indian firms investing abroad and on outward remittances by resident Indians.

The central bank reduced the limit for overseas direct investment (ODI) by domestic companies, other than oil PSUs, under the automatic route from 400% of net worth to 100%. Higher levels of ODI would now need prior approval from RBI.

Last week, Finance Minister P Chidambaram had reiterated that the current account deficit (CAD) would be brought down to $70 billion this fiscal from $88.2 billion in the previous year and steps would be taken to increase foreign fund inflows.

High gold imports pushed CAD to a record high of 4.8% of GDP in 2012-13 when India imported 845 tonnes of yellow metal. Import of gold in April-July 2013-14 rose 87% to 383 tonnes as compared to the same period of last fiscal.

In order to curb import of gold and contain CAD, the government raised customs duty on precious metals like gold, silver and platinum to 10%.

RBI also imposed restrictions on import of gold coins, medallions and dorebars and said importers would require licence for the purpose from Directorate General of Foreign Trade (DGFT).

Referring to the rupee, he had said, "Given our fiscal deficit, given our CAD, there will be some pressure on rupee and rupee will indeed depreciate. All that we are saying is that we cannot allow the rupee to go into a free fall. We are arguing for a stable rupee."

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First Published: Mon, August 19 2013. 15:55 IST