Encourage formal saving instruments more than gold: Assocham

Being the largest importer of gold in the world,India accounts for nearly one-third of the annual demand. The nation imported gold worth USD 33.8 billion in 2010-11.

Gold as a commodity does not add much to the productive capacity of an economy,the study said,by adding the gold import bill could be USD 100 billion by 2015-16.

8220;As the government increased import and excise duties on gold and silver,both commodities are set to cost more,8221; it said.

In January,the government had raised duty to two per cent of the value on 10 grams of gold and six per cent on 1 kg of silver,meaning that importers have to pay double the duty.

8220;… gold imports are a huge burden on the balance of payments and accentuates the current account deficit. On the other hand,it represents a massive strain on investable resources,8221; it said.

The chamber said efforts must be made to introduce more financial saving instruments and extensive education campaigns should be undertaken,particularly in rural areas,to minimise propensity towards gold.