Interim Budget: 2013-14 current account deficit seen at USD 45bn

The finance minister P Chidambaram sees 2013-14 current account deficit (CAD) USD 45 billion. CAD, which is the difference between the inflow and outflow of foreign exchange, stood at USD 88.2 billion in 2012-13. Rising gold and crude imports were the key culprits behind the widening CAD.

Gold imports had touched 162 tonne in May. The government hiked import duty on gold three times in 2013 taking the levy to 10 percent and had also imposed other import restrictions. Pick up seen in exports and declining gold imports have contributed to the improvement in CAD, which dropped to 1.2 percent in second quarter, as against 4.9 percent in the first quarter.

The CAD in the first half (April-September) of current fiscal narrowed to USD 26.9 billion (3.1 percent), from USD 37.9 billion (4.5 percent) in the first half of 2012-13.

Interim Budget: Watch Chidambaram's full speech here

India's exports increased 3.79 percent to USD 26.75 billion in January 2014, helping the trade deficit to narrow to USD 9.92 billion. For the April-January period, exports were up 5.71 percent to USD 257.09 billion. Gold and silver imports declined 77 percent in January to USD 1.72 billion against USD 7.49 billion in the same month last year.