No additional efforts to curb gold imports, says Finance Ministry

The government is not contemplating additional measures to curb gold imports, which are expected to drop substantially this month, a senior Finance Ministry official said on Tuesday.

"(With) recent measures that the government and RBI have taken on curtailing gold import, we should see a significant drop in gold imports for June. We are not contemplating any additional restrictive measure on gold as of now," Chief Economic Advisor in the Finance Ministry Raghuram Rajan told reporters in New Delhi.

He said gold imports, which in the first 13 business days till 20th May averaged USD 135 million a day, had fallen considerably to USD 36 million in the 14 business days ending last Friday.

 

Besides, Rajan said oil prices are low and exports are also picking up, which would help to narrow the Current Account Deficit (CAD) over the next few months.

"Going forward the government will undertake measures to ensure that CAD is safely financed," he said.

Worried over huge gold demand that is impacting CAD, the government hiked the customs duty to 8 per cent while the RBI has put restrictions on banks to import gold.

The monthly average import in the current fiscal was 152 tonnes as against 70 tonnes in 2012-13.

India's CAD, which touched a record high of 6.7 per cent of GDP in December 2012 quarter, is likely to be around 5 per cent during the last fiscal.

RBI has been saying that India can sustain a high CAD and ideally it should be around 2.5 per cent of the GDP.

Gold prices spurt by Rs 415 today to Rs 28,515 per 10 grams.