Defending oil taxes, Finance Minister Nirmala Sitharaman says weak rupee making imports costlier

Finance minister Nirmala Sitharaman said on Friday that the government and the Reserve Bank of India are keeping “a good eye” on rupee depreciation, which makes imports expensive. A hike in import duty on gold, announced earlier in the day, was aimed at discouraging these non-essential imports as these were affecting the country’s current account balance, the minister said.

According to the RBI data, India’s current account deficit (CAD) decreased to $13.4 billion or 1.5% GDP in Q4FY22, from $22.2 billion (2.6%) in the previous quarter, but the deficit is seen to have widened in the June quarter to around $17 billion. It may remain elevated in the near term as trade deficit in most months of FY23 could exceed the $20-billion mark.