Regardless of the likelihood of the current account deficit (CAD) narrowing to less than $ 50 billion, Finance Minister P Chidambaram remains in the favour of continuation of some kind of restriction on gold imports. Some experts, including RBI Governor Raghuram Rajan, have recently favoured removing the curbs on gold imports because they lead to smuggling.
According to Finance Minister, the country should attempt to discover gold by itself. Referring to a recent Supreme Court judgement on auction of all closed mines, he said that the Mines Ministry should sell the so-called closed mines because there are persons around the world who have met me and said, 'Give us the mines and we would be able to extract gold’. The minister also reiterated the government's commitment to restrict the fiscal deficit to 4.8 percent of GDP in the year ending March 2014.
No gold has been imported since July 22, after the Indian government hiked the import duty on the yellow metal. The high duty has further increased gold price in India. In order to contain the widening current account deficit, the government last hiked the duty on gold from 8% to 10%. Prior to this, the government had twice hiked import duty from 4% to 6% and then to 8%. The government in August, had also turned the screws on gold buying, banning imports of coins and medallions and making domestic buyers pay cash. Meanwhile, RBI also acted on multiple fronts for curbing gold imports.
According to Finance Minister, the country should attempt to discover gold by itself. Referring to a recent Supreme Court judgement on auction of all closed mines, he said that the Mines Ministry should sell the so-called closed mines because there are persons around the world who have met me and said, 'Give us the mines and we would be able to extract gold’. The minister also reiterated the government's commitment to restrict the fiscal deficit to 4.8 percent of GDP in the year ending March 2014.
No gold has been imported since July 22, after the Indian government hiked the import duty on the yellow metal. The high duty has further increased gold price in India. In order to contain the widening current account deficit, the government last hiked the duty on gold from 8% to 10%. Prior to this, the government had twice hiked import duty from 4% to 6% and then to 8%. The government in August, had also turned the screws on gold buying, banning imports of coins and medallions and making domestic buyers pay cash. Meanwhile, RBI also acted on multiple fronts for curbing gold imports.
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