The Chief of the Prime Minister’s Economic Advisory Council Mr. C Rangarajan stated that the country could tolerate gold imports worth $30 billion, but nothing more than that.
The unrestricted gold imports had inflated the country’s Current Account Deficit (CAD) to excessively high levels during last fiscal. The tight curbs on gold import by RBI and the government have kept the gold imports under check so far this fiscal. The country’s gold and silver imports plunged 80.55% year-on-year in November from $5.4 billion in 2012 to $1.05 billion this year, according to the latest data.
"As inflation comes down and as financial assets become more attractive, perhaps this part of demand for gold can come down and we can probably tolerate $30 billion worth of import of gold," C Rangarajan said while addressing Economic Conclave 2013 in Delhi.
Earlier, while delivering the inaugural speech, Indian Finance Minister had stated that by avoiding import of gold and other raw materials, the fiscal deficit of the country could be tied to 3% of the Gross Domestic Product (GDP) by 2016-’17.
Meanwhile participating in the panel discussion at the Conclave, RBI Governor Raghuram Rajan stated that a part of reduction in CAD comes obviously from suppressing gold imports.