Government sets up panel to examine non-essential goods import

 NEW DELHI: Worried over widening trade and current account deficit, the governmenthas constituted a committee to examineimports and suggest steps to contain inwardshipments of non-essential goods. 

The Committee will be headed by Rajat Bhargav, Joint Secretary (Budget) in the
Finance Ministry, an official said. 

"It will submit its report in about two weeks," the official said. 

Current Account Deficit (CAD) occurs when total imports of goods, services and transfers are higher than exports, reflecting outgo of foreign exchange. The CAD had hit a record high of 4.7 per cent in 2012-13 fiscal as rising oil and gold import widened the trade gap. 

Both the Reserve Bank as well as the government have taken a slew of steps to curtail gold demand. Besides, the oil bill, which stood at USD 140 billion in 2011-12, will come down only if crude prices go down by 10-12 per cent and the 
rupee is constant. India imports over 70 per cent of its oil demand, a big drain on forex. 

Although gold and silver imports dipped to USD 2.45 billion in June from USD 8.4 billion in the previous month, the overall imports grew by 22.8 per cent as compared to June 2012. Trade deficit had widened to 7-month high of USD 20.1 billion in May. 

Oil imports in June grew by 13.74 per cent to USD 12.76 billion. 

India's full-year exports fell for the first time in three years with a dip of 1.8 per cent to USD 300.6 billion in 2012-13, taking the country's trade deficit to a record high level of USD 191 billion.