India has registered a Balance of Payment deficit of USD 12.8 bn in FY2012 as against a surplus of USD 13.1 bn in FY2011. The current account deficit widened to USD 78.1 bn in FY2012, rising to 4.2% of GDP, far beyond the RBI comfort level of 3.0% .Trade deficit touched a record high of USD 190 bn with exports of USD 310 bn (23% growth as against 37% growth seen in FY 11) and imports rising to USD 500 bn (31% growth as against 27% growth in FY11). In FY 2009 we has BPO deficit of USD 20 Billion due to the Global crisis.
In the invisible segment the biggest contributor is service (USD 64 billion) registering growth of 32%. Transfers by NRI was 20% more at USD 65 Billion.
Total FDI inflow in FY 12 stood at USD 22 Billion as against only USD 9 Billion in FY 11. But FDI has moderated in the last quarter of FY 12. FDI inflow in March quarter was only USD 1.4 Billion as against USD 12 Billion in the first quarter.
Portfolio inflow (investment in Stock/ debt open market) came down to USD 16 Billion as against USD 28 Billion in the previous year. Major part of this USD16 Billion has come in the last quarter
The outlook for FY 13 is not so good. Much depends upon how the Government of India announces policy decision without coming under political pressure. All reform must be done very quickly to bring back the CAD to 3% of GDP and BOP to positive.
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