Govt raises gold import duty by 50 pc; prices shoot up

January 22, 2013

gold_price
New Delhi, Jan 22: The government on Monday slapped higher import taxes on gold, raising it from 4 to 6 per cent, a move expected to moderate its import and also curb India's passion for the yellow metal which has put tremendous strain on state finances.

The government also proposed to make changes in the gold deposit schemes and make it more attractive for people to deposit their gold with banks.

Shortly after news of the duty hike, gold prices shot up by Rs 315 to Rs 31,250 per 10 grams and markets sources say it may go up to Rs 700 per 10 grams in the short term.

An estimated 20,000 tonnes of gold is lying idle with Indian households. “The government will link Gold Exchange Traded Fund (ETF) with gold deposit scheme, which will enable mutual funds to unlock their physical gold and invest in gold-linked schemes offered by banks.

The proposed changes will help moderate import of gold and help bridge the current account deficit,” Department of Economic Affairs Secretary Arvind Mayaram said here. He, however, added that the duties will be reviewed if there is moderation in the quantity of gold imported into the country.

India’s gold import is estimated at $38 billion in 10 months up to December 2012 from $56.5 billion in fiscal 2011-12. A 50 per cent rise in import duty is seen important to curb the current account deficit, which has widened to $38.7 billion or 4.6 per cent of the GDP in the first half of the current financial year.

The move to link Gold ETF with deposit schemes will help increase physical availability of gold in the market, as a part of the gold lying in stock will be brought into circulation to meet the demand of gems and jewellery trade, the secretary said.

Gold futures traded 1 per cent higher immediately after the announcement.The government also made some changes in the quantity and tenure for the gold deposit scheme in order to make it attractive to individuals.

The minimum quantity of gold to be deposited into gold deposit schemes will now be reduced and the minimum tenure would be brought down to six months from the present three years.

Market regulator Sebi and the Reserve Bank are expected to come out with notifications on gold ETF and gold deposit schemes in two to three weeks.

Gold ETF is provided by mutual funds, in which the units are backed by physical gold held by the MFs. Gold deposit schemes are offered by banks, in which gold deposited by client is lent by the banks to the gems and jewellery trade.

Finance Minister P Chidambaram had recently expressed concern over rising gold imports and the consequent overflow of foreign exchange which was putting pressure on the current account deficit which widened 5.4 per cent in the second quarter of current fiscal ending September 2012.

But, analysts said gold still looked more attractive to Indian consumers with nearly 13 per cent rise in domestic prices, while the interest rates offered by the bank were around 9 per cent and inflation hovered above 7 per cent.

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April 23,2024

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Congress workers protested outside the home of Nilesh Kumbhani, the party's candidate from Gujarat's Surat Lok Sabha seat whose nomination form was rejected due to alleged discrepancies, as he was likely to join the BJP, sources said on Tuesday.

The protest came a day after the BJP's Mukesh Dalal was declared the winner from the party stronghold following the withdrawal of all the other eight candidates in the fray.

The sources said that the protesters called Kumbhani a "traitor" and "killer of democracy", adding that he could join the BJP as early as this week.

Kumbhani's nomination form was rejected after he was unable to present even one of his three proposers before Returning Officer Sourabh Pardhi.

The BJP had raised questions about the discrepancies in the signatures of three proposers in his nomination form.

The nomination form of Suresh Padsala, the Congress' substitute candidate from Surat, was also invalidated, pushing the party out of the poll fray in the BJP stronghold.

In his order, Pardhi said the four nomination forms submitted by Kumbhani and Padsala were rejected because at first sight, discrepancies were found in the signatures of the proposers, and they did not appear genuine.

The Lok Sabha elections in the Surat seat was supposed to take place on May 7.

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April 24,2024

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Ambikapur (Chhattisgarh): Prime Minister Narendra Modi on Wednesday hit out at the Congress, saying the 'vote bank hungry' party wanted to implement reservation on the basis of religion.

Addressing a poll rally in Ambikapur, the headquarters of Surguja district in Chhattisgarh, PM Modi also said the Congress wanted to impose inheritance tax in the country and snatch the rights of people's children.

Some forces want a "weak" government of the Congress and "I.N.D.I." alliance in the country as they thought that if India becomes 'atmanirbhar' (self-reliant), their shops will be shut, he said.

"Today when I have come to Surguja, I want to present the Muslim League thinking of the Congress in front of the country. When their manifesto was released, on the same day I had said, and saying today also that the Congress manifesto has the imprint of Muslim League," Modi said.

When the Constitution was being drafted, it was decided under the leadership of Babasaheb Ambedkar that there would be no reservation on the basis of religion in India, he said.

"If there will be reservation then it will be for by Dalit brothers and sisters and tribal brothers and sisters," he said.

"But the vote bank hungry Congress never cared about the words of the great personalities, sanctity of the Constitution and the words of Babasaheb Ambedkar. Years ago, the Congress made an attempt to implement reservation on the basis of religion in Andhra Pradesh. Then Congress has planned to implement it in the entire country," Modi said.

They talked about implementing 15 per cent reservation on the basis of religion and said it will be done after curtailing the quota of the Scheduled Castes, Scheduled Tribes and Other Backward Classes, he added.

In its 2009 manifesto, Congress's intention was the same and in the 2014 manifesto, it clearly said it will not leave this issue, the prime minister said.

The Congress wanted to change the Constitution and hand over rights of the SCs, STs and OBCs to its vote bank, he said.

The intention of the Congress is not good, it is not according to the Constitution, social justice and secularism. If anyone can protect your reservation, it is the BJP, Modi said.

"The Congress's eyes are not only on your reservation, but also on your earnings, your houses, shops and farms. The 'shehzada' of Congress (apparently referring to Rahul Gandhi) says they will conduct an X-ray of the property of every house and every family in the country. The Congress will snatch all these from you and they say that they will equally distribute them," he said.

Do you know to whom they will distribute it after 'looting' it from you? Modi asked, to which the people replied in affirmative.

"I need not to tell you to whom they will distribute," he added.

Modi further said the 'dangerous intentions' of Congress are coming to forth one by one and now it says it will impose inheritance tax.

"The advisor of shehzada of the shahi parivar, who was also the advisor to the shehzada's father, had said that more tax should be imposed on the middle class and those who earn by toiling hard. Now the Congress says it will impose inheritance tax. It will impose tax on the assets inherited by people from their parents. Now, the panja (Congress poll symbol) will snatch the assets from your children," he said without taking any name.

The Congress' mantra is 'loot of Congress zindagi ke sath bhi, zindagi ke baad bhi', he said.

"They (Congress) want to snatch your assets and rights of your children," Modi added.

The PM also said he had come to seek people's blessings for a developed Chhattisgarh and a developed India.

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April 15,2024

New Delhi: India is likely to experience above-normal cumulative rainfall in the 2024 monsoon season with La Nina conditions likely to set in by August-September, the IMD has said on Monday.

However, normal cumulative rainfall does not guarantee uniform temporal and spatial distribution of rain across the country, with climate change further increasing the variability of the rain-bearing system.

Climate scientists say the number of rainy days is declining while heavy rain events (more rain over a short period) are increasing, leading to frequent droughts and floods.

Based on data between 1951-2023, India experienced above-normal rainfall in the monsoon season on nine occasions when La Nina followed an El Nino event, India Meteorological Department chief Mrutyunjay Mohapatra told a press conference here.

Positive Indian Ocean Dipole conditions are predicted during the monsoon season. Also, the snow cover in the Northern Hemisphere is low. These conditions are favourable for the Indian southwest monsoon, he said.

Moderate El Nino conditions are prevailing at present. It is predicted to turn neutral by the time monsoon season commences. Thereafter, models suggest, La Lina conditions may set in by August-September, Mohapatra said.

India received "below-average" cumulative rainfall -- 820 mm compared to the long-period average of 868.6 mm -- in 2023, an El Nino year. Before 2023, India recorded "normal" and "above-normal" rainfall in the monsoon season for four years in a row.

El Nino conditions -- periodic warming of surface waters in the central Pacific Ocean -- are associated with weaker monsoon winds and drier conditions in India.

Three large-scale climatic phenomena are considered for forecasting monsoon season rainfall.

The first is El Nino, the second is the Indian Ocean Dipole (IOD), which occurs due to differential warming of the western and eastern sides of the equatorial Indian Ocean, and the third is the snow cover over the northern Himalayas and the Eurasian landmass, which also has an impact on the Indian monsoon through the differential heating of the landmass.

The southwest monsoon delivers about 70 percent of India's annual rainfall, which is critical for the agriculture sector. Agriculture accounts for about 14 percent of the country's GDP.

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