Sunday, December 28, 2014
Curbs on gold imports drive smuggling: Centre
The Union government has said restrictions imposed on gold imports to stem the pressure on the Current Account Deficit (CAD) are likely to have led to a substantial increase in smuggling. From April to September this year, there was a more than four-fold increase in the seizure of smuggled gold, to 2,289 kg, against 522 kg seized during the same period last year.
Giving the information in a reply to a written question in Parliament last Friday, Minister of State in the Finance Ministry Jayant Sinha said: “…there had been a substantial increase in the seizure of smuggled gold as well as in the gold imports.”
Twelve Lok Sabha members had raised questions about gold imports.
“The increase in seizures of smuggled gold this year, compared to last year, may partly be attributed to the fluctuations in the price of gold, the restrictions imposed on the import of gold and customs duty rates,” Mr. Sinha said.
To stem the pressure on the CAD, the government and the Reserve Bank of India had taken measures to moderate the demand for the precious metal. These included an increase in customs duty on imports and prohibition of gold in the form of coins and medallions. Nominated banks and other entities were told to make available at least 20 per cent of every lot of gold import as input for export. The obligation to export was on star or premier trading houses and refineries. Also, gold import to the Special Economic Zones (SEZs) and Export Oriented Units (EOUs) was permitted for the sole purpose of export.
As the CAD situation improved and the quantum of gold imported reduced significantly, at November-end, the Centre withdrew the stipulation of a minimum export of 20 per cent of every lot of import.
In response to another question on the seizure of smuggled gold at Delhi International Airport, Mr. Sinha said field formations had been suitably alerted and surveillance enhanced. The number of seizure of smuggled gold had risen from 1 during 2011-12 to 294 from April to November 14 this year, he said. The quantity of gold seized was also up from 2 kg to 447 kg. As against one person arrested during 2011-12, 144 people were arrested this year.