Current Account Deficit and Capital Inflow

What does it mean when Kaushik Basu says we don't need capital controls yet, even while the rupee appreciates and imports grow at a much faster rate than exports. In my attempt to understand why and how experts say that our current account deficit (above 3% GDP) is alright, I found an article written in 1998 at the Federal Reserve Bank of New York website - Viewing the Current Account Deficit as a Capital Inflow. This article explains the scenario when U.S was witnessing huge capital inflows while it had a considerably large current account deficit. It talks about some people claiming that the unemployment they had at that time was because they were allowing the current account deficit to rise. The authors argue that looking at the situation from a micro angle of imports exceeding exports does not entirely justify the claim that there is unemployment. They in turn make us look at the economy wide perspective where these inflows financing the deficit were actually employment generating foreign investment capital. The reason for decline in  U.S. exports at that time was the recession in Asia. It also gives an example of recession in Japan which brought investment in Japan down, shifting all their excess savings to U.S. and other parts of the world.

"Given the low level of domestic private saving in recent years, U.S. economic growth would likely be choked off by higher interest rates and reduced investment spending if the nation had no access to this capital."

It gives some insight into the current situation of both U.S. and India. Indeed the situation today is different. U.S. faces high unemployment and huge trade deficit. India faces a considerable current account deficit as well while we also have huge capital inflows. One of the aims of QE2 is to encourage investment spending and notwithstanding the claims made by Germany and China that QE2 aims at manipulating the exchange rate, the indirect impact of a weaker dollar is also a positive thing. And what about India? We have to note that unlike Brazil we are not an export dependent economy. India would have faced tight liquidity conditions if not for the inflows, given the persistent inflation RBI would have anyway raised rates. But how does the government make sure that the inflows coming in will definitely lead to employment and high growth?