Page 128 - economic_survey_2021-2022

102 Economic Survey 2021-22

Figure 13: Current Account Balance (CAB)

a. CAB and as percent of GDP b. Composition of CAB
30 6 Net Merch. Trade Bal Net Services
CAB CAB to GDP ratio (RHS)
60 Net Transfers Net Income
20 4 40 -15.0 -7.6 -2.6 0.6 19.1 15.3 -2.2 -8.2 6.5 -9.6

US$ Billion 10 0 2 0 Per cent of GDP US$ Billion 20 0

-10 -2 -20
-40
-20 -4 -60
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2019-20 2020-21 2021-22 (P) 2019-20 2020-21 2021-22 (P)
Source: RBI
Note: P: Provisional
CAPITAL ACCOUNT/ FINANCIAL ACCOUNT

3.39 In H1: FY 22, net capital flows more than tripled to US$ 65.6 billion (4.5 per cent of GDP)
over those in H1: FY 21, on the back of continued inflow of foreign investment, rise in loans
mainly external commercial borrowings (ECBs), banking capital and other capital (inclusive
of SDR allocation of US$ 17.9 billion by the IMF) (Table 7). These were also higher than the
corresponding period of pre-pandemic level (H1: FY 20).

3.40 Net capital flows remained volatile yet witnessed y-o-y and sequential growth in both
quarters of 2021-22. While the capital flows rose in Q1: FY 22 mainly on account of robust
foreign direct investment on y-o-y basis, it increased further in Q2: FY 22 mainly due to the
increase in FPI, ECBs and allocation of special drawing rights (SDR) by IMF, reflected in
notable rise in net other capital (Figure 14).

Table 7: Capital Account Balance
(US$ Billion, unless otherwise indicated)

S.No. Year / Item (Net) 2019-20 2020-21 2020-21 H1 2021-22 H1 (P)
A. Capital Account (A1 to A5) 83.2 63.7 17.3 65.6
A1. Foreign Investment 44.4 80.1 31.5 25.4
A1.1 Foreign Direct Investment (FDI) 43.0 44.0 23.9 21.2
A1.2 Foreign Portfolio Investment (FPI) 1.4 36.1 7.6 4.3
A2. Loans 25.7 6.9 -1.1 10.4

A3. Banking Capital -5.3 -21.1 -9.0 4.4
A4. Rupee Debt Service -0.1 -0.1 -0.1 -0.1
A5. Other Capital 18.5 -2.1 -4.0 25.4
Capital Account Balance to GDP
B. 2.9 2.4 1.5 4.5
ratio (Percent)
Source: Reserve Bank of India
Note: P: Provisional