Steps to contain gold imports soon

Worried over the high Current Account Deficit (CAD), the government is contemplating more steps to curb gold imports, which according to Finance Minister P Chidambaram stood at 162 tonnes during May.

"For May, the import of gold was 162 tonnes," he told reporters after a meeting of the Financial Stability Development Council (FSDC) here.

At its meeting on Monday, the FSDC, headed by Chidambaram, also discussed the concerns on gold imports. "The Council noted with concern the significant increase in gold imports in recent months and deliberated on the issues involved in this regard," the Finance Ministry said in a statement after the meeting.

Department of Economic Affairs Secretary Arvind Mayaram too hinted that the government could take more steps to reduce gold imports, which may include banning sale of the yellow metal by banks.

"More steps will have to be taken to reduce gold imports. Export import policy on gold will have to be reviewed. May consider banning gold coin sale by banks," he said on Monday.
He was talking to reporters after a meeting of the sub- committee of Financial Stability and Development Council (FSDC), headed by RBI Governor D Subbarao.

The Committee also discussed regulations of chit funds, Mayaram said. Gold and silver imports during April 2013 jumped by 138 per cent to $7.5 billion against $3.1 billion in the same period a year ago. Due to high gold imports, the country's trade deficit in April widened to $17.8 billion year-on-year.