THE SENIOR ANALYST
Year
Jan 2014
2009-10
Budgetary
Outlay
2010-11
2011-12
2012-13
39,000
40,000
31000
33000
EXHIBIT#4
(http://164.100.129.6/GRAPH/graphnewx
ml.aspx)
CONCLUSION
to the verge of financial bankruptcy and
becoming a default on its external balance of
payment obligations. This crisis was primarily
caused by currency overvaluation and large and
imbalanced fiscal deficits. As an emergency
response, Reserve Bank of India had to airlift 47
tons of gold to the bank of England to raise funds
and to tide over this critical situation.
To put an end to this debate of disinvestment, it
is evident that roughly Rs. 50000 crore is required
to ensure an effective functioning of these
programmes. And what else can you do with the
public money if not spending for them. We end
with a thought that though implementation and
finding new ways once we divest stakes in these
CPSE to 51% still remain a challenge.
By V.V. Raviteja & Neeladyuthi.K
(IMT Ghaziabad)
GOLD and CAD
The Yellow Fever of CAD
Bollywood should be given a vote of thanks to
glamorize Gold Smuggling by the choice of
profession by most of the villains. As gold imports
were banned until 1992, it was the only option
open to bring gold into the country. Post
liberalized India saw a sharp rise in the
consumption of the yellow metal by being the
highest consumer in the world. But lifting off the
bans had no effect on the smuggling business.
Raising the import tax on gold had also increased
the insatiable demand for gold in India. These
desire combined with greed had acted like an
incentive to skip the levy and get more gold in
India.
Importance of Gold in Economy
Since 1985, India had payment problems and in
1991, the foreign reserves of India had dropped
to such a point to support the country for three
weeks’ worth of imports which had brought India
Gold Imports has been one of the major
contributors to the ever widening Current
Account Deficit in India .India imported a
whooping USD 38billion in the first three quarters
of this fiscal year. The crux of the problem is that
the investors are shunning the glitter of the gold
whose prices slums at regular intervals. On the
other hand, crazy Indians are sacrificing their
currency and country’s bargain for gold. Buying
millions of dollars’ worth of foreign gold, it
disrupts the balance money by sending Indian
cash overseas and thus driving down the value of
the money.
Gold is synonymous with security to hedge
against inflation. It is generally viewed by 2 billion
people more as a means of savings. As bank has a
minimum balance requirements and other prerequisites, the common people hold their assets
in form of gold to use as collateral during bad
times. Come to think of it, even the lawyers and
many businessmen buy gold as a secure financial
strategy .With Indian capital market and real
estate business losing its lustre, gold securities
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