Current account balance shows excess growth in end-June period
India’s current account balance recorded a surplus of $6.5 billion in the first quarter of the current fiscal year, mainly due to the shrinking trade deficit.
According to figures released by the Reserve Bank of India (RBI) for the balance of payments over the period April-June 2021-22, the current account balance surplus of $6.5 billion over the period above was due to the contraction of the trade deficit to $30.7 billion. compared to $41.7 billion in the previous quarter (January-March 2020-21).
The surplus was also recorded due to the increase in net revenue from services, the central bank said.
Net revenue increased both sequentially and year-over-year due to the strong performance of net exports of computer and business services.
The current account surplus in the first quarter of the current fiscal year contrasts sharply with the $8.1 billion deficit recorded in the fourth quarter (January-March period) of 2020-21.
The current account balance had also registered a surplus of $19.1 billion during the corresponding period last year, i.e. the April to June quarter of 2020-21.
Private transfer receipts, representing mainly remittances from Indians employed abroad, amounted to $20.9 billion in the first quarter of 2021-2022, an increase of 14.8% from their level from a year ago, according to the RBI statement.
Similarly, net foreign direct investment recorded inflows of $11.9 billion during the April-June period of the current fiscal year, compared to outflows of $0.5 billion during the corresponding period. of the previous year.
Net foreign portfolio investment was $0.4 billion in the first quarter of the current fiscal year, compared to $0.6 billion in the first quarter of 2020-2021.
Net external commercial borrowing to India recorded inflows of $0.5 billion in the first quarter of 2021-2022 against an outflow of $0.6 billion in the prior year period.
There was a $31.9 billion increase in foreign exchange reserves (on a balance of payments basis) during the April-June 2021-22 period, compared to that of $19.8 billion during the period April-June 2020-21.