In an attempt tame unsatiating demand for gold, the government is planning to put more restriction on gold. According to sources the finance ministry wants the commerce ministry to review wastage and value added norms to curb gold usage, reports Ronojoy Banerjee.
Sources said wastage in studded gold jewellery could go as high as 7 percent. Finance Ministry is keen that these wastages are brought down as it will then leave the jewelers no options but to export more. The other norm which government is considering altering is value addition which currently can go as high as 5 percent on certain type of jewellery. Also read: Gold bears seen gaining upper hand; Rs 23000/10 gm on cards
These norms which are part of foreign trade policy have not been altered in last four years. Norms are mentioned in the forth paragraph of the handbook of foreign trade policy.
Sources said that very soon commerce ministry is likely to take up this matter. Now whether this will be enough to tackle this menace of gold demand that we will only have to wait and watch.
This could be the last ditch attempt of government to discourage gold loving Indians from hoarding the yellow metal, which had recently hiked gold import duty to rein in ballooning current account deficit. Even RBI has been on a crusade to restrict gold demand.
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