The current account deficit since FY 2013–14 (i.e., period after the taper talk) has been below 2 per cent of GDP, though it rose to 2.7 per cent in the first half of the financial year 2018–19 reflecting elevated crude oil prices. Modest current account deficit in recent years was accompanied by robust flows of foreign direct investment (FDI).
Another could be that since rice and wheat are the primary food commodities procured at the MSP, production is distorted towards rice and wheat, leading to a suboptimal production mix by farmers – too much rice and wheat, and too little of other needed commodities. Both these explanations would suggest the need for more moderation as the government sets the MSPs in coming months.