While the worry about rapidly growing imports and the burgeoning current account deficit appears to be somewhat misplaced, the possible risks to an otherwise rosy outlook arise from: inflation; interest rate; and fiscal stance.
In a capital-scarce economy like India, a current account surplus is symptomatic of insufficient investment. There is clear need to enhance investment.
Higher investment is likely to result in higher imports of basic, intermediate and capital goods and trade and current account deficit.
Union Budget & Economic Review, Government Of India
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