Press Esc to close
Monday 06 July 2015
News updated at 8:15 AM IST
Weather
Max: 33°C
Min : 20°C
In Bengaluru
Partially cloudy
Breaking News

Plan to check gold import

New Delhi, Jan 2, 2012, DHNS :

Move may hike price of yellow metal

Gold prices may go up further if the Centre goes ahead with its plan for restricting import of the yellow metal. 

The demand for gold has contributed hugely in increasing India’s current account deficit. The government had already increased the import duty on the yellow metal in the last budget.

“Gold import must be moderated. We cannot afford to spend so much on importing gold. Import of gold is a huge strain on current account,” Finance Minister P Chidambaram told reporters here on Wednesday.

He said if the imports were not moderated, the government would be left with no choice but to make its imports more expensive. The current account deficit widened to a record high of 5.4 per cent of GDP in the September quarter due to slowing export growth, high gold imports and a hefty oil bill.

This is for the second time in a year that the government is contemplating taking measures to curb gold import. In the Budget for 2012-13, the then finance minister Pranab Mukherjee had already doubled the import duty on gold to 4 per cent.

Chidambaram said he expected gold imports to touch $40 billion in the current fiscal and said curbing it was necessary also from the point of view of saving India’s foreign exchange.

“Suppose gold imports had been one half of the actual level, that would have meant that our foreign exchange reserves would have increased by $10.5 billion,” he said.

India’s gold import bill was $58 billion in 2011-12. This moderation in gold imports was mainly due to raising of import duty.

On apprehensions that rise in import duty has led to increased smuggling of yellow metal, Chidambaram said the reports “are mostly speculative.”

“May be some smuggling has taken place but whatever level of duty, there is always smuggling,” he said. The increasing current account deficit is still a worry.

The minister said the only solace was that it was being financed without drawing on country's foreign exchange reserves, mainly because of adequate inflows of FDI, which stood at $12.8 billion and FII that was at $1.7 billion this year.

Chidambaram said there was some accretion in foreign reserve. It had been raised by $0.4 billion or $400 million.


Go to Top

Photo Gallery
'Umbrella Workshop' where people paint umbrellas with colors in Navi Mumbai...

'Umbrella Workshop' where people paint umbrellas with colors in Navi Mumbai...

Visitors looking the BSF weapons on the occasion of the 50th anniversary of the BSF...

Visitors looking the BSF weapons on the occasion of the 50th anniversary of the BSF...

Mobile app ' Namma Bellad' launched in Bengaluru...

Mobile app ' Namma Bellad' launched in Bengaluru...

Sadhvi Niranjan Jyoti feeds cows during her visit to Gir Seva Goshala in Ahmedabad...

Sadhvi Niranjan Jyoti feeds cows during her visit to Gir Seva Goshala in Ahmedabad...

An highly decorated Vruksha hall during the 'BJP Maha Samparka Abhiyan 2015'...

An highly decorated Vruksha hall during the 'BJP Maha Samparka Abhiyan 2015'...

A fire broke out at Sony manufacturing plant in Navi Mumbai on Sunday...

A fire broke out at Sony manufacturing plant in Navi Mumbai on Sunday...

Pilgrims crosses the mountains as they move towards Amarnath Holy Cave Shrine...

Pilgrims crosses the mountains as they move towards Amarnath Holy Cave Shrine...

A Kashmiri Muslim woman offers noon prayers in the ruins of an ancient Hindu temple...

A Kashmiri Muslim woman offers noon prayers in the ruins of an ancient Hindu temple...

A security man keeps vigil on the mountains near Amarnath Holy Cave Shrine 3880 meters high...

A security man keeps vigil on the mountains near Amarnath Holy Cave Shrine 3880 meters high...

An Indian boy practices Mallakhamb, a traditional Indian gymnastic sport...

An Indian boy practices Mallakhamb, a traditional Indian gymnastic sport...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bengaluru - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523