Monday, August 8

Govt weighs import curb options: Tight vigil on irrational spike in any segment

Economists expect the current account deficit to widen to 3% of GDP in FY23 from 1.2% from a year.

The government has stepped up scrutiny of imports to identify irrational spikes in any segment, official and industry sources told FE, amid indications that “non-essential imports” could be targeted should the situation so warrant.

Separately, the finance ministry told Parliament on Tuesday that the government and the central bank are closely monitoring inflation and “are ready to take appropriate action”.

The government has also tightened its vigil of the global price movements of various commodities and their impact on the Indian economy through trade, minister of state for finance Pankaj Chaudhary said in a written reply in the Rajya Sabha. The overall impact of the exchange rate depreciation on domestic prices “depends on the extent of pass-through of international commodity prices to the domestic market”, he added. Retail inflation hit 7.01% in June, having remained above the central bank’s comfort level for a sixth straight month.

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