The recent softening in global commodity prices bodes well for Indian economy and may lead improving the balance of payments situation this fiscal, a top policymaker has said.

“There are several factors that are operating. The commodity prices are somewhat softening. The world economy is also slightly better than last year. All of these factors should contribute to pick up in exports and reduction in rate of growth in imports. The balance of payments situation should be better…”, C. Rangarajan, Chairman of Prime Minister’s Economic Advisory Council, told reporters after launching the ESCAP report here.

He, however, declined to comment on the likely impact on the current account deficit, which had worsened to a record 6.7 per cent of GDP in October-December 2012 quarter.

The fourth quarter CAD number will be released on Tuesday next.

On the annual supplement to foreign trade policy, Rangarajan said that measures announced on Thursday would help raise the level of exports from the country. “These are well conceived steps and are intended to stimulate exports and will happen,” he added.

Earlier, in his address at the ESCAP report launch event, Rangarajan said the phase of low economic growth (for India) had bottomed out. He expressed confidence that India would return to 8-9 per cent growth trajectory in the next few years.

He said that capital flows should not be “decried”, stating that they were playing an important role in the economy.

It is capital flows that have enabled many countries in the Asia-Pacific region to stand on their own, Rangarajan pointed out, adding “but one needs to be watchful”.

The ESCAP 2013 report clearly brings out that 2013-14 will be better than 2012-13 for India even though growth rate this fiscal is likely to be lower than the pre-crisis levels.

srivats.kr@thehindu.co.in

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