Current account deficit a concern

The CAD for India came at a very high percentage of 6.5% and it has in some way it created a panic in the economy.

This can be seen in the way that the markets have fallen.

The CAD is basically the difference between the imports and exports in the economy. The higher the CAD , the bigger is the issue on how it impacts us as an economy.

Now the impact is due to the fact that we are importing a lot more and the costs of those importing goods is increasing. We import a significant part of oil, some specific pulses.

The way to try and reduce the gap is to try and increase exports . One can increase exports by

1. Driving and giving incentives for companies who are in the export sector ( IT, Textiles, etc). Now if you remember the government had taken away all sops for these sectors and in one way has killed the golden goose that was driving the economy. 

2. Devalue the rupee further. While This will drive the exports it also increases the costs of imports .. so this is not an answer.

How we drive this is going to be an interesting story... unfortunately our government has made multiple mistakes in the economy even though we had the so called experts in the prime minister background.

Its simplefinancialsense.