India's current account deficit (CAD) may fall below 3.8 per cent in the current financial year, according to Planning Commission Deputy Chairman Montek Singh Ahluwalia.

Mr.  Ahluwalia said the delay in gradual withdrawal of monetary stimulus by the U.  S.  Federal Reserve and the stabilization of the rupee would bring improvement in the Indian economy.

Speaking on the topic, "The bottom line on CAD is that news is very good.  It will be lower than 3.8 per cent."

However, Mr.  Ahluwalia declined to comment on Planning Commission member Saumitra Chaudhuri's projection that the country's CAD would drop to 2.5 per cent of GDP this financial year.

He said that projection by Saumitra Chaudhuri was made six months back, when finance ministry had higher assumption of economic growth; but the economic growth had slipped since then.

In the last quarter of last financial year, India's economy grew at a rate of 4.8 per cent.  In the first quarter of this financial year, the economy's growth further slipped to 4.4 per cent.  The government now expects the economy to grow in the range of 5-5.5 per cent this financial year.

CAD - the difference between inflows and outflows of foreign exchange - hit its all-time high of 4.8 per cent of the country's gross domestic product (GDP) or US$88.2 billion.

Government aims to drag CAD down to US$70 billion or 3.8 per cent of the country's GDP this year.