The government on Friday indicated that it may curb non-essential imports in the weeks ahead and take steps to boost exports besides announcing a number of measures to shore up the rupee and control the current account deficit.
The five steps announced following a meeting chaired by Prime Minister Narendra Modi to review the state of the economy include scrapping withholding tax on masala bonds — rupee-denominated debt sold overseas — and relaxations in the overseas debt regime.
Modi was briefed by Reserve Bank of India governor Urjit Patel and finance ministry officials, finance minister Arun Jaitley told reporters after the meeting late on Friday.
Jaitley said the items on which import restrictions would be imposed will be finalised in consultation with stakeholder ministries and departments to ensure they are in sync with WTO norms.
The items most likely to face curbs are gold, mobiles and other electronic items. “To address the issue of expanding CAD, the government will take necessary steps to cut down non-essential imports and increase exports,” Jaitley said. “The commodities of which imports will be cut down will be decided after consultations with concerned ministries and will be WTO-compliant.”
The RBI and department of economic affairs have suggested more measures and a decision on these will be taken over the next few days.