The Reserve Bank of India (RBI) on Wednesday, 22 June, indicated that the present account balance recorded a deficit of 1.2 percent of GDP in 2021-22, as against a surplus of 0.9 percent in 2020-21.
This came as the trade deficit widened from US $102.2 billion to US $189.5 billion in a year.
Net invisible receipts were higher in 2021-22 due to increase in net exports of services and net private transfer receipts, even though net income outgo was higher than a year ago, an RBI press release stated.
Meanwhile, the country saw its account deficit (CAD) decrease to US $13.4 billion (1.5 percent of GDP) in the fourth quarter of the financial year 2021-22, compared to US$ 22.2 billion (2.6 per cent of GDP) in the third quarter.
As per the press release, the sequential decline in CAD in the fourth quarter was mainly on account of a moderation in trade deficit and lower net outgo of primary income.
Current account deficit occurs when the value of goods and services imported and other payments exceeds the value of export of goods and services and other receipts by a country in a particular period.