FinMin not contemplating more import curbs to tame CAD

Finance Ministry today said it is not planning hike in duties of any more non-essential items as restrictions on imports of gold, silver and platinum are enough to tame Current Account Deficit (CAD).

'Gold, Silver, Platinum is what we believe as non- essentials. We have put curbs on that. I don't think we need any more curbs,' Economic Affairs Secretary Arvind Mayaram told reporters here.

The government earlier this week raised import duty to 10% on gold, silver and platinum in third revision this year in a bid to curb the surging imports and burgeoning CAD, a decision that will also rake in an additional Rs 4,830 crore to the exchequer.

While the duty on gold and platinum was raised from 8% to 10%, the levy on silver was hiked by 4%, according to the notifications tabled in Parliament by Finance Minister P Chidambaram.

'As far as imports are concerned, we have said we will curb non-essentials and we have taken measures to do so. Now you will have to live with that for a while,' Mayaram said.

Gold imports have been mainly responsible for spurt in CAD which touched at a record high of $88.2 billion or 4.8% of GDP in 2012-13.

Finance Minister P Chidambaram had earlier said that CAD will be contained at $70 billion or 3.7% this fiscal.

Import of gold went up by a huge 87% from 205 tonnes in April-July 2012 to 383 tonnes during the corresponding period this year. In value terms, the increase was 68% from Rs 56,488 crore to Rs 95,092 crore.

Chidambaram had earlier said in Parliament that government would compress import of certain items of non- essential nature, which had raised speculation that government could raise duty on luxury cars and other items.

Even an inter-ministerial committee set up by Finance Minister has suggested that government could consider higher duties on items which do not have a bearing on inflation.