The government on Monday hiked the import duty on gold and platinum to 6 per cent from 4 per cent with immediate effect — a move aimed at curbing imports of the precious metals to check the widening current account deficit. 'Government has decided to increase import duty on gold and platinum from 4 per cent to 6 per cent with immediate effect,' Department of Economic Affairs Secretary Arvind Mayaram told reporters.
He further said the government will link Gold Exchange Traded Fund (ETF) with gold deposit scheme, which will enable mutual funds to unlock their physical gold and invest in gold- linked schemes offered by banks. 'The changes proposed to the Gold deposit scheme will make it attractive for individuals to deposit their idle gold with the banks under the Gold deposit scheme,' Mayaram said.
He said the changes would help moderate import of gold and help in bridging the current account deficit (CAD). Gold imports in 2011-12 amounted to $56.5 billion and in the current financial year till December, they are estimated at $38 billion.
'The duties will be reviewed after sometime if there is a moderation in the quantity of gold that is imported into the country,' he said. Gold was trading at Rs 30,935 per 10 grams on Monday. The move to link Gold Exchange Traded Fund with deposit schemes will help increase physical availability of gold in the market, as a part of the gold lying in stock will be brought into circulation meeting the demand of gems and jewellery trade.
'Consequently, there will be a moderation in the quantity of gold that is imported into the country,' Mayaram said. He said the minimum quantity of gold that may be deposited into the Gold deposit scheme would be reduced and the minimum tenure would be brought down to six months, from the present three years.
Market regulator Securities and Exchange Board of India (Sebi) and the Reserve Bank will come out with notifications on Gold Exchange Traded Fund and gold deposit schemes in two to three weeks.
Gold Exchange Traded Fund is provided by Mutual Funds (MF), in which the units are backed by physical gold held by the MFs.
Gold deposit schemes are offered by a number of banks, in which gold deposited by client is lent by the banks to the gems and jewellery trade.
The announcement, which follows concerns expressed by Finance Minister P Chidambaram over rising imports of gold, comes nearly a month before the Union Budget on 28 February. Traditionally, India has been the world's largest consumer and importer of gold.
Outflow of the foreign exchange on gold imports is impacting country's Current Account Deficit (CAD), which has widened to $38.7 billion or 4.6 per cent of the Gross Domestic Product (GDP) in the first half of the current fiscal.
COMMODITY BOURSE TURNOVER DIPS 5.5% IN FIRST 9 MONTHS OF FISCAL
The turnover of commodity exchanges fell 5.54 per cent during the April-December period to Rs 1,29,62,447 crore because of decline in bullion trade.
'The cumulative value of trade from 1 April 2012 up to 31 December 2012 during the financial year 2012-13 was Rs 129,62,447.62 crore,' market regulator FMC said in its report. The turnover of commodity bourses was Rs 1,37,22,854 crore in the corresponding period of previous fiscal. Bullion trade declined by 25.30 per cent in the first nine months of 2012-13 to Rs 60,03,141 crore, from Rs 80,36,753 crore in the year-ago period. However, total trade in agriculture commodities during the period rose 16 per cent to Rs 17,12,849 crore, from Rs 14,71,629 crore in the nine months of the previous fiscal.
Similarly, trade in metals (other than bullion) increased by 17 per cent from April-December at Rs 23,99,548 crore, from Rs 20,43,105 crore in the year-ago period.
The trade in energy was up by Rs 28,46,907 crore compared with Rs 21,71,364 crore during the period under review.
There are more than 20 commodity exchanges (both national level and regional) in the country.
He further said the government will link Gold Exchange Traded Fund (ETF) with gold deposit scheme, which will enable mutual funds to unlock their physical gold and invest in gold- linked schemes offered by banks. 'The changes proposed to the Gold deposit scheme will make it attractive for individuals to deposit their idle gold with the banks under the Gold deposit scheme,' Mayaram said.
He said the changes would help moderate import of gold and help in bridging the current account deficit (CAD). Gold imports in 2011-12 amounted to $56.5 billion and in the current financial year till December, they are estimated at $38 billion.
'The duties will be reviewed after sometime if there is a moderation in the quantity of gold that is imported into the country,' he said. Gold was trading at Rs 30,935 per 10 grams on Monday. The move to link Gold Exchange Traded Fund with deposit schemes will help increase physical availability of gold in the market, as a part of the gold lying in stock will be brought into circulation meeting the demand of gems and jewellery trade.
'Consequently, there will be a moderation in the quantity of gold that is imported into the country,' Mayaram said. He said the minimum quantity of gold that may be deposited into the Gold deposit scheme would be reduced and the minimum tenure would be brought down to six months, from the present three years.
Market regulator Securities and Exchange Board of India (Sebi) and the Reserve Bank will come out with notifications on Gold Exchange Traded Fund and gold deposit schemes in two to three weeks.
Gold Exchange Traded Fund is provided by Mutual Funds (MF), in which the units are backed by physical gold held by the MFs.
Gold deposit schemes are offered by a number of banks, in which gold deposited by client is lent by the banks to the gems and jewellery trade.
The announcement, which follows concerns expressed by Finance Minister P Chidambaram over rising imports of gold, comes nearly a month before the Union Budget on 28 February. Traditionally, India has been the world's largest consumer and importer of gold.
Outflow of the foreign exchange on gold imports is impacting country's Current Account Deficit (CAD), which has widened to $38.7 billion or 4.6 per cent of the Gross Domestic Product (GDP) in the first half of the current fiscal.
COMMODITY BOURSE TURNOVER DIPS 5.5% IN FIRST 9 MONTHS OF FISCAL
The turnover of commodity exchanges fell 5.54 per cent during the April-December period to Rs 1,29,62,447 crore because of decline in bullion trade.
'The cumulative value of trade from 1 April 2012 up to 31 December 2012 during the financial year 2012-13 was Rs 129,62,447.62 crore,' market regulator FMC said in its report. The turnover of commodity bourses was Rs 1,37,22,854 crore in the corresponding period of previous fiscal. Bullion trade declined by 25.30 per cent in the first nine months of 2012-13 to Rs 60,03,141 crore, from Rs 80,36,753 crore in the year-ago period. However, total trade in agriculture commodities during the period rose 16 per cent to Rs 17,12,849 crore, from Rs 14,71,629 crore in the nine months of the previous fiscal.
Similarly, trade in metals (other than bullion) increased by 17 per cent from April-December at Rs 23,99,548 crore, from Rs 20,43,105 crore in the year-ago period.
The trade in energy was up by Rs 28,46,907 crore compared with Rs 21,71,364 crore during the period under review.
There are more than 20 commodity exchanges (both national level and regional) in the country.