Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench

Getting tough on gold imports won't work, two former Indian central bankers say

IMG Auteur
Published : December 05th, 2012
437 words - Reading time : 1 - 1 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
FOLLOW : Central Bank, Gold, India
Category : GoldWire

 

 

 

 

From The Indian Express, New Delhi
Sunday, December 2, 2012

http://www.indianexpress.com/news/-being-tough-on-gold-imports-won-t-wor...

MUMBAI -- Two former governors of the Reserve Bank of India warned Saturday against taking tough measures to rein in gold imports -- a major reason for the persistently high current account deficit.

The chairman of the Prime Minister's Economic Advisory Council, C. Rangarajan, said steps like banning gold imports would only push up its smuggling.

Rangarajan, who served as RBI governor, said there are already indications that illegal shipments of the precious metal have gone up in the last three months after the hike in the excise duty.

"That is an indication of how much gold is being smuggled in. I would say to some extent we should dissuade people from holding an asset that does not give a rate of return. However, you can't go beyond a particular point," Rangarajan said here at a function organised by the Indira Gandhi Institute of Development Research, an institution set up by the RBI.

Former governor Y.V. Reddy said, "If Mercedes Benz and aftershave lotion can be imported, why not gold? It is both an investment and consumption good. Many people seem to mistake that it is only a hedge against inflation. There is a demand for it. It is being imported. If you can, try to stop it."

The RBI Governor D. Subbarao said the central bank is "concerned about gold as means of saving because it blocks off savings."

"We are concerned about gold ... lending against gold by non-bank finance companies because of financial stability concerns. We have been concerned about gold from an external management perspective because of the pressure it puts on the current account or the capital account depending on your account for it," Subbarao said.

On growth and inflation, Bimal Jalan, Rangarajan's successor and Reddy's predecessor, said, "There are periods when growth is more important and you take policy measures to boost it. There are periods when you have to control inflation because that is the dominant public issue. So there will be periods when you take measures, however harsh they are, to control inflation."

Reddy added household savings, which was an achievement until recently, is now the most critical challenge for the future. "The behavior of household savings indicates that they do not have faith in financial markets except banks. It is a bad sign."

Rangarajan said, "If what has happened in the three-year period of decline is reversed either because of a fiscal consolidation program or because of inflation coming down, it is possible to get back ... if not the 9-percent but the 8-percent rate of growth."

 

 

Data and Statistics for these countries : India | All
Gold and Silver Prices for these countries : India | All
<< Previous article
Rate : Average :0 (0 vote)
>> Next article
Chris Powell is the secretary of the Gold Anti-Trust Action Committee (GATA) which has been organized to advocate and undertake litigation against illegal collusion to control the price and supply of gold and related financial securities.
WebsiteSubscribe to his services
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Mining Company News
Royal Dutch Shell(Oil)RDSA.AS
Hull damage forces Shell Arctic support ship in for repairs
€UR 24.84-1.97%Trend Power :
Corporate news
Royal Dutch Shell(Oil)RDSA.AS
Oil & Gas Stock Roundup: BP Resolves GoM Claims for $18.7B, Shell OKs Appomattox Project - Analyst Blog
€UR 24.84-1.97%Trend Power :
Corporate news
NextEraNEE
FPL announces plans to move forward with next major investment in continued modernization of its power plant fleet, building on successful strategy of advancing affordable clean energy in Flori
US$ 102.88+2.41%Trend Power :
Corporate news
Scorpio GoldSGN.V
Scorpio Gold Reports Results from 2015 Exploration Drilling at the Bluelite North Target Area, Mineral Ridge Project, Nevada
CA$ 0.12-4.17%Trend Power :
Corporate news
Manas Resources(Au)MSR.AX
7 July - Board Changes
AU$ 0.01+0.00%Trend Power :
Corporate news
Excelsior MiningMIN.V
Excelsior Announces Updated Mineral Resource Estimate
CA$ 0.38-2.60%Trend Power :
Corporate news
Alcoa Inc.AA
With global economic policies hamstrung, investors turn to earnings
US$ 11.06+0.27%Trend Power :
Corporate news
Alcoa Inc.AA
July 7 Premarket Briefing: 10 Things You Should Know
US$ 11.06+0.27%Trend Power :
Corporate news
Alcoa Inc.AA
Why The Container Store and Alcoa need to beat earnings
US$ 11.06+0.27%Trend Power :
Corporate news
Anaconda Min.(Au)ANX.TO
Kevin Bullock Joins Board of Directors of Anaconda Mining
CA$ 0.05+0.00%Trend Power :
Nominations
Comments closed