Govt can take more steps, if needed, to curb gold imports: FM
Worried over widening current account deficit (CAD), the government Monday indicated that it could take more steps to check gold imports.
New Delhi: Worried over widening current account deficit (CAD), the government Monday indicated that it could take more steps to check gold imports.
"Some more steps, if necessary, would have to be taken, but I appeal to the people of India to contain their passion for gold," Finance Minister P Chidambaram told reporters here.
Gold imports jumped by 138 percent to USD 7.5 billion last month, the highest so far this year, pushing up the trade deficit to USD 17.7 billion.
"We anticipated that the gold import will increase. April and May all over India are months when there is largest number of weddings. So, we were not surprised that gold imports increased in the second half of April," he said.
The government had taken several steps in the recent past, including raising import duty, to curb the inbound shipments of gold. RBI too had put restrictions on banks on gold imports.
"The passion for gold is causing imports and it is leaving a big hole in the current account deficit," Chidambaram said.
The country's CAD has widened on account of increased gold imports, which rose to 1,017 tonnes in 2012-13 from 471 tonnes in 2000-01. Gold imports last year accounted for 72 percent of CAD-- difference between outflows and inflows of foreign currency.
High gold and oil imports widened the CAD, which touched a record high of 6.7 percent of GDP in the October-December quarter of 2012-13 fiscal.
Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan had last week said gold imports should be brought down from 1,000 tonnes per year to 700 tonnes, which prevailed few years ago.