KOLKATA: Experts predicted that Indian households hold nearly 20,000 tonnes of yellow metal and if Finance Minister, Arun Jaitley’s gold monetisation scheme fails then gold smuggling will continue through illegal route.
Gold import attracts 10% duty and despite several representations by the industry, Jaitley did not reduce it in the budget announced on Saturday, raising fears that unofficial gold supply will increase in the ma ket.
“The FM has announced a slew of measures to curb black money in India, yet he has ignored one of the biggest issues of smuggling of gold into the country. Unless the import duty is lowered, the unofficial route will thrive and even black money may find a way into the country in the form of gold,” said Mehul Choksi, chairman of Gitanjali group.
According to the World Gold Council, nearly 200 tonnes of gold entered India in 2014 through the illegal route. The landed cost of “official” gold has increased by 20% in the last one year compared with unofficial gold, as the premium went up due to strict import norms, gold traders said. “The impact of this ” unofficial” supply of gold is valued at about $10 billion, leading to a loss in foreign exchange inflow of a similar amount and a loss in revenue of over $1 billion on account of customs duty,” Choksi said.
