Bhubaneswar, June 19 (IANS) A trade body Wednesday said the restriction on import of gold imposed recently by the government may bring short-term benefits but warned it would do more harm than good for the nation in the long run.
The All India Gems and Jewellery Trade Federation (GJF), the country’s nodal and largest single trade body representing over 600,000 traders in gems and jewellery sector, said duty on gold has risen from one percent in January 2012 to eight percent in June this year.
Noting that the government has now asked all the banks to totally stop or restrict supply of gold, GJF’s regional chairman (east) and director Mitesh Khimji told reporters here that the restriction has encouraged illegal imports of gold towards which the government appears to be least concerned.
To reduce current account deficit (CAD), it may not be necessary to reduce consumption as the effects of the exercise done by increasing import duty in the past proved futile, he claimed.
On the contrary, it worked adversely and consumption actually increased as purchases were made earlier then needed and a shortage created due to slow supply, Khimji contended.