India’s balance of payments (BoP), including current as well as capital accounts, returned to surplus in the quarter through June 30, figures released by the Reserve Bank of India (RBI) on Friday revealed.

According to the released figures, the total FOREX reserves saw an outflow of US$5.7 billion in the January-March quarter, but it improved to give a surplus of US$0.5 billion in the April-June quarter.

A surplus of US$0.5 billion in the recent quarter is much smaller when we compare it with the balance of payments surplus of US$5 billion in the year ago period. But, even the small balance of payments surplus has reversed the trend of outflows and showed signs of improvement.

But, experts argued that rating agencies will not consider capital surplus; rather these agencies take the country’s current account deficit into account, which is still high.

Saugata Bhattacharya, an economist with Axis Bank, said, “The capital account is in line with our estimates. Capital surplus will not be considered by the rating agency, they will look at current account deficit.”

The country’s current-account deficit has shrunk by 24% to US $16.4 billion in the April-June quarter from all time high of US $21.7 billion in the January-March quarter.

The government has started taking long-delayed harsh economic measures to address the current-account deficit and fiscal deficit. Earlier this month, the government reduced subsidies on diesel and LPG, and opened retail, aviation and broadcasting sectors to foreign investment.