Mumbai :Terming the “10 per cent depreciation” in the rupee in the last few weeks as a “temporary phenomenon”, Economic Affairs Secretary Subhash Chandra Garg said the government will stick to the fiscal deficit target of 3.3 per cent for this financial year despite all pain points such as rupee depreciation and rising oil prices. He also said that the government will soon announce import curbs on several non-essential items.
“Come what may, oil situation, rupee or whatever the fiscal deficit will not be allowed to slip from 3.3 per cent, or better as we go along. I think all the pain points, all the issues which were earlier thought of as something unknown, whether it’s the MSP (minimum support price), all these have now been factored into…this assessment makes us completely confident to say that we will stick to the fiscal deficit target,” he said.
Garg further said that rupee depreciation is a temporary phenomenon. “There are always implications of the dollar and rupee exchange rates…this 10 per cent depreciation in last few weeks that is a temporary phenomenon,” he said at an event organised by PHD Chamber of Commerce here.
To a question about when the government intends to impose import curb on non-essential goods, he replied, “very soon.” Last week, Finance Minister Arun Jaitley announced the government’s decision to relax norms for raising overseas borrowing and impose restrictions on the non-essential imports as part of efforts to check rising current account deficit (CAD) and a falling rupee. India’s current account deficit deteriorated to 1.9 per cent of GDP in 2017-18 from 0.6 per cent in the previous year. The trade deficit expanded to $80.4 billion in the first five months of the current fiscal year from $67.3 billion in the year-ago period.
The rupee has logged year-to-date losses of more than 13 per cent against the strengthening US dollar. It has dropped close to 6 per cent since August. The Economic Affairs Secretary also explained that since the dependence of 50 per cent of India’s populace is on agriculture, it needs a transition and therefore, required policy steps. The government has announced various schemes including Ujjwala Yojana, health protection and rural electrification with the intention to bring change in rural India, he said.
Besides, he said, the government has drawn up a programme for increasing the export of agricultural products from $30 billion to $100 billion. “India’s agri exports potential is as high as $100 billion against a current export of $30 billion. To realise this potential, export of agri commodities will be liberalised,” Jaitley had said while presenting the Budget 2018-19 in February. Meanwhile, the rupee on Wednesday rebounded 61 paise, notching up its best single-day gain since March 2017 to close at 72.37 against the dollar.