Press Esc to close
Monday 06 July 2015
News updated at 2:42 PM IST
Weather
Max: 33°C
Min : 20°C
In Bengaluru
Partially cloudy

RBI moots tax sops for pledging gold

Jan, 2, 2013 Mumbai, dhns:

The Reserve Bank of India (RBI) on Wednesday put out a draft paper suggesting tax sops for pledging gold with banks and higher duties on import of the precious metal, aimed at containing the adverse effect of gold imports whose impact on current account deficit (CAD) soared to an all-time high.

In fact, gold import is a major constituent of the country's rising current account deficit (CAD) -- the difference between exports and imports after considering cash remittances and payment --  widened to a record high of 5.4 per cent of GDP, or $22.3 billion, in the July-September quarter, as per government data.

The draft report -- coinciding with the Finance Minister P Chidambaram's statement in New Delhi on Wednesday, that his government is contemplating steps to make gold imports more and more expensive -- was emphatic of a need to moderate the demand for gold imports.  "There is a need to moderate the impact on the current account deficit. Fiscal measures to reduce the gold imports may be revisited," it said.

Further, the RBI's report of the Working Group on gold also came out with large number of recommendations to deal with the rising gold imports. It suggested that banks need to design innovative financial instruments that can provide real returns to investors.
Recommending "introduction of tax incentives on instruments that can impound idle gold may be considered," the report said there is a need to convert both rural and urban demand for gold into investment in gold-backed financial instruments through dematerialisation of gold.

Gold loans have a causal impact on gold imports substantiating the emergence of a liquidity motive for holding gold, the report said. It also pointed out that international gold prices and exchange rate "significantly and positively" affect the gold prices in India.  


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