it is expected that the trade deficit in the current year would not be significantly higher than what it was last year. Consequently, it is reasonable to expect that the current account deficit as a ratio of GDP would be lower than what it was in 2011-12,” the report said. The CAD is projected at 3.7% this fiscal.
Rajan said disinvestment has gathered pace with the successful NMDC share sale which raised Rs 5,980 crore. The government has so far raised Rs 6,914 crore through share sales in NMDC, Hindustan Copper and NBCC. Rajan also pointed to the importance of improving the corporate bond market as well as the ability of the equity market to finance infrastructure requirements.
On tax collection, he said low corporate profitability was impacting revenue realisation. “Corporate profit earnings are not growing at pace; it was growing in past. We hope we will start picking up once again and that should add buoyancy. (If) people are not making money as much as they were then clearly it is going to impinge on that kind of revenue,” he said.