Faced with a sudden surge in gold imports, the government is set to impose fresh curbs on import of the yellow metal including tightening the 80:20 scheme.
“Things are being worked out by the finance ministry and some announcements are likely in a day or so,” said a person familiar with the development. Sources said the finance ministry is considering bringing back the provisions on the 80:20 scheme that were relaxed in May, allowing star trading houses to import gold.
The scheme was originally introduced in July 2013 to curb gold imports and mandates that any importing agent — nominated banks and agencies — must re-export at least 20 per cent of the gold imported with value addition. Finance secretary Rajiv Mehrishi had also met officials from the department of commerce and the Reserve Bank of India last Thursday to review the provisions. “Some more measures are being looked at as well. A decision will be taken soon,” said the source.
The CAD, which had touched a record high of $88.2 billion or 4.8 per cent of GDP in 2012-13 is estimated to have dropped to below $32.4 billion or 1.7 per cent of GDP in 2013-14. Even import duty was raised to 10 per cent, gold imports surged almost four times year-on-year to $4.17 billion in October.