Press Esc to close
Wednesday 31 August 2016
News updated at 2:13 AM IST
Weather
Max: 21°C
Min : 25°C
In Bengaluru
Cloudy sky

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
Activists of All Bodo Student's Union protesting to demand the creation of a separate state...

Activists of All Bodo Student's Union protesting to demand the creation of a separate state...

Rajiv Gandhi Khel Ratna awardee gymnast Dipa Karmakar and Dronacharya award winner coach...

Rajiv Gandhi Khel Ratna awardee gymnast Dipa Karmakar and Dronacharya award winner coach...

A newly inducted Provincial Armed Constabulary (PAC) personnel quenching his thirst...

A newly inducted Provincial Armed Constabulary (PAC) personnel quenching his thirst...

A view of decorated Shivalinga at Somnath on Tuesday...

A view of decorated Shivalinga at Somnath on Tuesday...

Workers transport an idol of Hindu god Ganesh on a cart ahead of the Ganesh Chaturthi festival...

Workers transport an idol of Hindu god Ganesh on a cart ahead of the Ganesh Chaturthi festival...

Actress Katrina Kaif during a promotional event for her film 'Baar Baar Dekho' in Jaipur...

Actress Katrina Kaif during a promotional event for her film 'Baar Baar Dekho' in Jaipur...

Former Australian cricketer Glenn McGrath poses during a promotional event in Kolkata...

Former Australian cricketer Glenn McGrath poses during a promotional event in Kolkata...

Victor Banerjee with actress Raima Sen and Argentinian film director Pablo Cesar...

Victor Banerjee with actress Raima Sen and Argentinian film director Pablo Cesar...

Actor Milind Soman during a press conference to promote Pinkathon run in Jaipur on Tuesday....

Actor Milind Soman during a press conference to promote Pinkathon run in Jaipur on Tuesday....

Sand artist Manas Sahoo creates a sand sculpture on the eve of local self governance day in Puri...

Sand artist Manas Sahoo creates a sand sculpture on the eve of local self governance day in Puri...

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