The Hindu Business Line : Current account surplus doubled last fiscal

INDIA'S current account was in surplus at $ 3.44 billion in the fourth quarter of January-March 2004, according to the latest Reserve Bank of India figures on the country's balance of payments. The surplus for the financial year to March 2004 grew to $8.72 billion from $ 4.13 billion a year ago.

Merchandise exports and imports rose in tandem in January-March 2004, as a result of which the trade deficit at $ 4 billion remained stable at the level recorded in October-December 2003, but well below that of the first quarter of 2003, according to RBI.

" The robust growth of merchandise exports, software remittances and travel receipts comfortably financed the large increase in import payments during 2003-04. Consequently the current account balance turned from a modest deficit in the first quarter to surpluses from the second quarter onwards", said an RBI press release.

Invisibles have been the pivot for the turnaround in the current account from deficit to surplus since 2001-02, the apex bank has said.

A steady expansion in net earnings from invisibles occurred through 2003-04, peaking in the third quarter (October-December).

Some moderation set in the fourth quarter, although the buoyancy in the surplus in the invisible account was sustained. Tourism, software and remittances were the key drivers of the invisible surplus. Earnings from travel improved with international tourist traffic rising by 18.2 per cent, according to RBI.

Software exports weathered the global IT slowdown and protectionist pressure in major international markets and rose by 27.1 per cent in 2003-04 with the maximum increase recorded in the fourth quarter.

According to the central bank, private transfers comprising mainly remittances from Indians working abroad rose steadily through the year with a surge in the third quarter.

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