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The government is considering doing away with the controversial 80:20 scheme for gold import, in a bid to partially relax the restrictions on import of the yellow metal that led to a surge in smuggling. The scheme was introduced in July last year to check rising current account deficit.
“The current account deficit is well within manageable limits now. The scheme has served its purpose and a view is firming up that the scheme should now be done away with. It is being seriously considered. A decision on this will be taken after the vote-on-account,” a senior official told The Indian Express.
Earlier last week, UPA chairperson Sonia Gandhi had written a letter to commerce minister Anand Sharma seeking action on demands made by gems and jewellery exporters for a cut in customs duty on gold and relaxation in the 80:20 rule. According to the scheme, gold importers have to ensure that at least 20 per cent of every lot of import is exported.
Meanwhile, finance minister P Chidambaram on Monday said that the Centre will revisit some of the restrictions on gold import but only when it has a firm grip on CAD.
“I am confident that by the end of this (financial) year we will be able to revisit some of the restrictions on gold import but we will do so only when we are absolutely sure that we have a firm grip on the current account deficit,” he said.
The official said the scheme has though proved to be a big deterrent for importers, an adverse fallout has been a rise in smuggling of gold, which has risen to the tune of 1-3 tonne per month.
A directorate of revenue intelligence official said that during April-November, 206 people were arrested, a jump of over 400 per cent year-on-year, while 576 cases worth Rs 211 crore were booked, a jump of over 300 per cent YoY.