Gold duty may go up, banks slow coin sales
- Navy officer dies on board INS Kolkata off Mumbai
- SC calls Sahara proposal an âinsultâ, Subrata Roy to stay in jail till March 11
- I'm not a terrorist, Modi should have met me: Arvind Kejriwal
- Modi to hold 'Chai Pe Charcha' on women empowerment on Saturday
- Will not campaign for any candidate, says Anna Hazare
With gold imports spiking 138% year-on-year in April, driving up the import bill to $7.5 billion, an anxious government may be looking to raise import duty on the precious metal by two percentage points to 8%. The trade deficit for April widened to $17.8 billion compared with $10.3 billion in March, dampening hopes of a meaningful correction in India's current account deficit (CAD), which hit a record 6.7% of GDP in the third quarter of FY13. Senior government officials, however, attempted to play down April's jump in gold purchases, calling it an "aberration".
Nevertheless, given that appetite for the precious metal remains robust and the CAD precarious, it's possible steps will be taken to discourage purchases of gold.
The surge in demand for physical gold last month — after the duty was upped to 6% in January — has been explained by the dramatic drop in global gold prices in the wedding season even as investment demand showed signs of moderating. Economic affairs secretary Arvind Mayaram told reporters it appeared that traders imported large quantities as a hedge against a future rise.
"It's an aberration... But then, there is a limit on how much you can buy and hold. Because there is a carrying cost to that. So, I believe we will see some correction next month. We don't believe imports are going to be at the same level," Mayaram said.
Planning Commission deputy chairman Montek Singh Ahluwalia too said imports should come down by half from last year's levels.
"I would expect in 2013-14, given the changing economic situation, there will be significant easing off of gold imports," Ahluwalia said.
Given the strong appetite in the first four months of 2013, the World Gold Council has estimated that demand would rise marginally to 900 tonnes in calendar 2013 despite several duty hikes. Imports in 2012 were around 862 tonnes. While retail demand shows little sign of abating, there has been a drop in import orders for Swiss branded gold coins sold by banks in India.
- Chai pe Charcha gets police protection, EC officials to check on poll norm violation
- Complaint against Kejriwal: Kutch cops gather evidence
- AAP chief to hold first public meeting in Gujarat today
- Nominations for North Bangalore primary begin
- ‘Our campaigning in the state will be out of the box’
- ‘Aai Retire Hotey’ to take the stage for 100th time today