PAN card must for high-value gold purchases: RBI panel
Headed by RBI official K U B Rao, the committee suggested three-pronged strategy – demand reduction, supply management and monetisation of gold stocks – to deal with the rising gold import which has widened Current Account Deficit (CAD).
The Committee suggested that introduction of gold-linked financial instruments, gold bonds and tax incentives on instruments that can impound idle gold.
"Creation of an alternative asset class that may provide returns comparable to return on investment in physical gold with similar flexibility is important," it said.
Gold import is the second major contributor to the CAD after oil. Gold import in April-December stood at USD 38 billion. In 2011-12 fiscal it was USD 56 billion.
The CAD, which is the difference between the inflow and outflow of foreign exchange, widened to a record high of 5.4 per cent of GDP in the July-September quarter.
"Large gold imports, if unchecked, can potentially threaten the external stability and, therefore, there is an unambiguous need to moderate them," RBI report said.
To contain gold import, the government last month hiked import duty on gold to 6 per cent, from 4 per cent. It also linked gold Exchange Traded Fund (ETF) with bank gold deposit scheme to enable MFs to unlock their physical gold and invest in gold-linked schemes offered by banks.
The panel further said there is a "need to reduce gold loan NBFCs'
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