Government will review gold import norms: Raghuram Rajan

The Reserve Bank of India (RBI) scrapped the 80:20 scheme on November 28. Introduced in August last year to control the country’s widening current account deficit (CAD), the rule enjoined all gold importers to supply at least 20 per cent of the quantity brought in to jewellery exporters. The RBI action follows the government’s decision to ease the restriction. With this, supply of gold should ease and smuggling gets a significant check. It will also reduce the documentation work at Customs offices, helping jewellers. After the announcement, RBI Governor Raghuram Rajan told media that the decision to scrap the rule mandating traders to export 20 percent of all gold imported into the country was a “reasonable” one and the government will review its gold import policies. During media interaction he said, “The government decided that it was probably best at this point to scrap the rule and it has been scrapped. Of course, there are now further requests to change the duty structure that the government will review in its own good time and decide … I think the decision is reasonable and let us see how it plays out.”