When CAD is bad

A record high current account deficit, at 6.7 per cent, is causing concern among policymakers. It is not yet clear whether 5 per cent will become the new normal. But evidently, old-style policies, like imposing a duty on gold imports, which policymakers had brought back a long time after the then Finance Minister Manmohan Singh had reduced it in 1991, have not contained the deficit.

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