Non-essential imports to be curbed, says Garg

New Delhi: Union Finance ministry on Wednesday said that the government will soon announce import curbs on several non-essential items in order to defend the rupee.

“There are always implications of the dollar and rupee exchange rates ... This 10 per cent depreciation in last few weeks that is a temporary phenomenon,” said a senior finance ministry official here. On when the government intends to impose import curb on non-essential goods, he replied, “very soon.”

Last week during an economic review with the Prime Minister which was attended by top finance ministry and RBI officials, it was decided that to control Current Account Deficit (CAD), restrictions will be imposed on the non-essential imports.

According to sources, steel ministry has proposed to increase import duty on steel products as part of measure to curb non-essential imports.

According to reports, government is also mulling raising duties on some farm commodities for few months. It may also impose curb on gold and high end electronic items.

However, before imposing curbs government is analysing how these measure will be challenged in WTO or will these be WTO compliant.

The official expressed confidence that fiscal deficit target of 3.3 per cent in 2018-19 will be met.  “Come what may, oil situation, rupee or whatever the fiscal deficit will not be allowed to slip from 3.3 per cent, or better as we go along. I think all the pain points, all the issues which were earlier thought of as something unknown, whether it’s the minimum support price, all these have now been factored into,” he said.

On the price rise, he official said, 4 per cent inflation for a developing economy is healthy, it is not something unhealthy or detrimental for the economy.

Meanwhile, Reuters, citing an unnamed governt official, on Thursday, said that the government is considering asking RBI to offer dollars directly to oil marketing companies or through a state-run bank as part of steps to stem the fall.As an “extreme” measure, the government could also look at raising dollars by tapping expatriates to invest in bonds for non-resident Indians, said the source who has direct knowledge of the deliberations over the rupee’s fall.Finance ministry spokesman D.S. Malik declined to comment.