The finance ministry is examining a proposal to take investment-type gold imports out of the current account and instead, treat them as part of the capital account. Kaushik Basu, chief economic adviser to the finance ministry, is studying this proposal, which could help reduce the country's current account deficit (CAD) which is expected to be over 3.5% this fiscal, the worst in recent years. Policymakers have little choice other than financing the current account with the capital flows that could be not only be unsteady but also uncertain.
Source: Financial Express
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