CPI asks govt to take urgent steps to curb current account deficit

NEW DELHI: CPI today asked the government to take urgent steps to curb the Current Account Deficit (CAD), which has risen to 4.9 per cent, making India "vulnerable" to weakening of the rupee.

"It is a well-known fact that such a high CAD has made our country vulnerable with the rupee weakening to abnormal levels. Consequently, the common man has to take the brunt with high inflation and spiralling fuel prices," CPI General Secretary S Sudhakar Reddy said in a statement here.

Maintaining that Finance Minister P Chidambaram had earlier said RBI had advised banks not to sell gold, he said, "The huge surge of gold demand, especially those sold by banks, has greatly played a role in the ballooning of the CAD, (which) has been admitted earlier by the government itself."

"However, it has been observed that both PSU and private banks are still randomly and openly selling gold coins across the counter. This is in direct contravention of the government claim on the advisory about gold coins as mentioned by the Finance Minister," Reddy alleged.

He asked the government to look into the matter and "provide a better way of execution and clarity of steps publicly announced with regard to curbing of the CAD."