Press Esc to close
Wednesday 29 July 2015
News updated at 1:15 AM IST
Weather
Max: 19°C
Min : 32°C
In Bengaluru
Rain lightly

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
Students of Indian Institute of Science (IISC) pays tribute to former President Abdul Kalam...

Students of Indian Institute of Science (IISC) pays tribute to former President Abdul Kalam...

People paying respects to the sand sculpture of former President APJ Abdul Kalam...

People paying respects to the sand sculpture of former President APJ Abdul Kalam...

The Indian national flag flies at half mast on the dome of India's presidential palace Rashtrapati..

The Indian national flag flies at half mast on the dome of India's presidential palace Rashtrapati..

Artist Ramzan Hussain makes a pencil sketch of former President APJ Abdul Kalam...

Artist Ramzan Hussain makes a pencil sketch of former President APJ Abdul Kalam...

SSM School students during the condolence meeting of Former President APJ Abdul Kalam...

SSM School students during the condolence meeting of Former President APJ Abdul Kalam...

School children in tears as they light candles to pay tribute to former President APJ Abdul Kalam..

School children in tears as they light candles to pay tribute to former President APJ Abdul Kalam..

Sachin Tendulkar paying his last respects to former President APJ Abdul Kalam...

Sachin Tendulkar paying his last respects to former President APJ Abdul Kalam...

Pranab Mukherjee laying a wreath on the mortal remains of former President APJ Abdul Kalam...

Pranab Mukherjee laying a wreath on the mortal remains of former President APJ Abdul Kalam...

Narendra Modi pays respect after the body of former President A.P.J. Abdul Kalam...

Narendra Modi pays respect after the body of former President A.P.J. Abdul Kalam...

Indian Air Force personnel pay their respects to former President of India APJ Abdul Kalam...

Indian Air Force personnel pay their respects to former President of India APJ Abdul Kalam...

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