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India’s Current Account surplus of 0.9% of GDP in FY21: RBI

India’s Current Account surplus of 0.9% of GDP in FY21: RBI:

As per data released by Reserve Bank of India (RBI), India has reported a current account surplus of 0.9 per cent of GDP in the Financial Year 2021 (FY21) amid the covid-19 pandemic. In 2020, it had reported current account deficit of 0.9 per cent

  • India’s current account deficit has increased to USD 8.1 billion or 1 per cent of GDP for March quarter in 2021 as compared to the surplus of USD 0.6 billion or 0.1 per cent of GDP in 2020 for same period.
  • India reported a deficit of 0.3 per cent in December quarter of 2020.
  • As per RBI, current account balance reached into surplus territory because of sharp contraction in trade deficit to USD 102.2 billion from USD 157.5 billion in 2019-20.
  • Net invisible receipts were low in FY21 because of an increasing outgo of overseas investment income payments and decrease in net private transfer receipts.
  • External commercial borrowings by India Inc recorded an inflow of USD 0.2 against 21.7 billion in 2019-20.
  • India witnessed an accretion of USD 87.3 billion to foreign exchange reserve on balance of payments basis.
  • Current account deficit in March quarter was high on account of high trade deficit and low net invisible receipts.
  • Private transfer receipts, representing remittances by Indians employed overseas, witnessed increase of USD 20.9 billion.
  • It was higher by 1.7 per cent from 2020 level.
  • Net outgo from primary income account, representing net overseas investment income payments, increased to USD 8.7 billion. It was USD 4.8 billion in 2020.