Manufacturing competitiveness is key

Finance minister P Chidambaram has repeatedly said he is far more worried about the growing current account deficit (CAD)—projected at over 5% of GDP—than the fiscal deficit. The question everyone is asking these days is whether India’s CAD has structurally moved to a much higher “new normal”. No one expected the CAD to worsen so much as it had remained under 2.5 % of GDP in recent years until 2010-11. So what has gone wrong now?

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