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Govt shelves temple gold to bullion plan

Last Updated: Thursday, September 12, 2013 - 14:52

Zee Media Bureau

New Delhi: With the possibility of a broad consensus on the reported proposal to turn temple gold into bullion remaining bleak, the government may abandon the plan.

The government had mulled over the possibility of buying ‘idle’ gold lying in temple vaults – especially in south India – to tide over the current account deficit (CAD) crisis in the economy (4.8% in last fiscal).

The RBI, which had written letters to some temples in Kerala, seeking details of the stock of gold in their possession, later clarified that the objective of the letter is to collect data and there is no proposal under its consideration (to buy gold and bullion from temples).

The letter had religious groups fuming, and was even raised in the Parliament by the BJP.

In view of the strong opposition, the government appears to have developed cold feet on the issue and seems wary of opening up an emotive issue to discussion in an election year.

An English news channel on Thursday quoted Union Minister of State for Finance, JD Seelam as saying that the government had looked at temple gold as the last resort. However, she added that the government will not need to go for the option.

Gold demand is cited as a major reason for rise in import of the precious metal, which is also one of the main reasons for the current account deficit (CAD) that has widened to a record 4.8 per cent of GDP in last fiscal.

India is the largest consumer of gold and last year the country shipped in 860 tonnes. It is estimated that the country sits over more than 30,000 tonne gold.

The RBI and the government have already taken various steps to control the gold import with a view to check CAD. The Centre recently raised customs duty on gold to 10 per cent.

The government has targeted a CAD at 3.7 per cent of GDP, or USD 70 billion, this fiscal against a record 4.8 per cent or USD 88.2 billion last fiscal.

First Published: Thursday, September 12, 2013 - 14:52

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