Press Esc to close
Friday 01 August 2014
News updated at 8:47 AM IST
Weather
Max: 0°C
Min : 0°C
In Bangalore
Sunny day

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
An man holds a cycle and wades through a flooded street as it rains in Mumbai. Heavy rainfall...

An man holds a cycle and wades through a flooded street as it rains in Mumbai. Heavy rainfall...

A traditional Teej procession at Tripolia Gate in Jaipur on Thursday...

A traditional Teej procession at Tripolia Gate in Jaipur on Thursday...

Gold medal winner Vikas Shive Gowda of India throws the discus in the final at Hampden Park...

Gold medal winner Vikas Shive Gowda of India throws the discus in the final at Hampden Park...

South Africa's Rhett Halkett, right, vies for the ball with India's Chandanda Nikkin, during...

South Africa's Rhett Halkett, right, vies for the ball with India's Chandanda Nikkin, during...

Arvind Panwar makes his way towards the finish line in the Men's Time Trial during...

Arvind Panwar makes his way towards the finish line in the Men's Time Trial during...

Dipa Karmakar of India performs during the women's gymnastics vault apparatus final at the 2014...

Dipa Karmakar of India performs during the women's gymnastics vault apparatus final at the 2014...

Babita Kumari wrestles with Canada's Brittanee Laverdure during the women's Freestyle...

Babita Kumari wrestles with Canada's Brittanee Laverdure during the women's Freestyle...

People at waterlogged Shivaji Chowk, Bhiwandi after heavy rains near Mumbai on Thursday...

People at waterlogged Shivaji Chowk, Bhiwandi after heavy rains near Mumbai on Thursday...

NDRF personnel with a body of a victim of landslide at Malin village on Thursday...

NDRF personnel with a body of a victim of landslide at Malin village on Thursday...

A crack seen on the highway caused by the erosion due to heavy rains at Kasara Ghat...

A crack seen on the highway caused by the erosion due to heavy rains at Kasara Ghat...

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