The Congress-led UPA government is preparing to announce some new measures to arrest the country's widening Current Account Deficit (CAD), according to Finance Ministry sources.

The sources said that the government could announce 5-6 measures to arrest CAD. It may ask Public Sector Units (PSUs) like IIFCL and IRFC to float quasi sovereign bonds worth more than $500 billion.

Another measure, which is currently under consideration, is increasing import duty on non-essential goods. This measure is expected to reduce imports by as much as $2 billion.

In addition, the Finance Ministry is expected to announce measures to stabilize the rupee, which has slipped to below the psychological mark of 60 per dollar.

A few days back, Finance Minister P. Chidambaram confirmed that the government might tap sovereign wealth, pension funds and NRI deposits to increase inflows of foreign exchange, which would support the rupee.

Mr. Chidambaram added, "We have put in place mechanisms to revive investment. Once investment revives, you will find that growth also revives. There is time lag between revival of investment and growth."

Depreciation in the value of rupee and ballooning CAD are two of the biggest problems that are being faced by the Indian economy. After hitting a record high of 6.5 per cent of GDP in the January-March quarter, it slipped to 3.6 per cent, but it is still far higher than the comfortable limit of 2.5 per cent.