Faced with five-fold rise in gold imports that is pushing up the current account deficit, Finance Minister Arun Jaitley on Monday said the government would look at re-imposing curbs on gold imports after Diwali.
“Let the festival season be over, I will have a look at it,” said Mr. Jaitley replying to a query on whether government will re-impose restrictions on gold imports. He was, however, non-committal on the nature of restrictions the government might go in for.
“I don’t want to spoil the festival season. It is only a few days away. Therefore, after the festival I will have to look at it,” Mr. Jaitley told a business channel. The government as well as the Reserve Bank of India had imposed a string of restrictions on gold imports as the country’s current account deficit (CAD) widened to a record high of 4.8 per cent of GDP in 2012-13. The government had increased the customs duty on gold to 10 per cent and banned import of gold coins and medallions, while the RBI linked imports of the metal to exports. However, the RBI has started easing some of the curbs and allowed more nominated agencies to import the yellow metal.
Gold imports jumped to $3.75 billion in September on account of the ongoing festive season. The imports stood at $682.5 million in the same month last year. Higher imports pushed up the country’s trade deficit to about 18-month high of $14.2 billion last month. Gold imports were down for quite a long time following the restrictions. On extension of excise duty sops for the auto sector expiring in December, Mr. Jaitley said the government would take a view at the right time.
