Press Esc to close
Saturday 25 June 2016
News updated at 2:51 AM IST
Weather
Max: 25.7°C
Min : 19.8°C
In Bengaluru
Generally 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
BJP activists holding a protest in front of Ram Remple in Bhubaneswar on Friday...

BJP activists holding a protest in front of Ram Remple in Bhubaneswar on Friday...

Puneri Paltan captain Manjeet Chillar poses for media during a press conference of Pro Kabaddi...

Puneri Paltan captain Manjeet Chillar poses for media during a press conference of Pro Kabaddi...

John Abraham, Varun Dhawan and Jacqueline Fernandez during the pramotion...

John Abraham, Varun Dhawan and Jacqueline Fernandez during the pramotion...

Former cricketer Venkatesh Prasad being feliciated with an Assamese traditional ...

Former cricketer Venkatesh Prasad being feliciated with an Assamese traditional ...

Modi paying floral tributes at the bust of former Prime Minister Lal Bahadur Shastri...

Modi paying floral tributes at the bust of former Prime Minister Lal Bahadur Shastri...

Prime Minister Narendra Modi interacts with Indian community children in  Tashkent...

Prime Minister Narendra Modi interacts with Indian community children in Tashkent...

Children of Madarsa Maulana Azad Upper Primary School pray for rains in Jodhpur ...

Children of Madarsa Maulana Azad Upper Primary School pray for rains in Jodhpur ...

Launch of the Rolls-Royce Dawn in Mumbai...

Launch of the Rolls-Royce Dawn in Mumbai...

Prime Minister Narendra Modi shakes hands with Russian President Vladimir Putin during...

Prime Minister Narendra Modi shakes hands with Russian President Vladimir Putin during...

Finance Minister Arun Jaitley addresses the Invest in India Business Forum in Beijing...

Finance Minister Arun Jaitley addresses the Invest in India Business Forum in Beijing...

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