The government tells Parliament: "Geopolitical confrontation to keep oil prices up, CAD under stress."

28 Jul 2022 , 07:49 AM

On Wednesday, the government notified Parliament that the Current Account Deficit (CAD) of net commodity importers, including India, continues to be stressed as long as the geopolitical turmoil keeps prices of commodities, especially crude oil, high globally.

As India’s economy recovered from the pandemic-induced contraction in GDP, the current account in the Balance of Payments moved from a surplus of 0.9% of GDP in 2020—21 to a deficit of 1.2% in 2021—22. This was due to increased economic activity in India.

According to the commerce and industry ministry, the Russia-Ukraine conflict followed by lockdowns imposed to battle the pandemic were the main causes of the disruption in supply chains that led to higher commodity prices globally, which contributed to the CAD.

Som Parkash, a minister of state for commerce and industry, informed the Lok Sabha that General Motors (GM), Harley Davidson, and Ford India have all stopped producing cars in India over the past five years due to the reorganization of their business operations, poor business planning, and a decline in domestic sales.

In light of the altered market environment, the Niryat Rin Vikas Yojan (NIRVIK) is being re-examined with the goal of developing an upgraded program that would provide enhanced protection for small exporters under the current Whole Turnover – Export Credit Insurance for Banks, Lok Sabha was made aware.

As of June 30, 2022, 1,40,530 orders from public organizations totalling more than Rs8,040 crore had been placed with 14,311 startups on the Government eMarketplace (GeM). DPIIT has accredited 72,993 startups, of which 34,473 (48%) are from the metropolises of Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bengaluru, Pune, and Ahmedabad. More than 3,300 DPIIT-recognized startups are active in the climate change area, offering solutions based on green technology and renewable energy.