India’s current account deficit (CAD) has been a source of worry and merits deeper discussion. The CAD reached 4.2 per cent of gross domestic product (GDP) in 2011-12. As global risks rose, capital inflows were lower at 3.7 per cent, requiring the Reserve Bank of India’s (RBI) draw-down of reserves, amounting to $ 12.8 billion, to make up the difference.