New Delhi: Easing the restrictions on gold imports, the government has done away with the '80:20' scheme, freeing incoming shipments of the precious metal from exports. Under the 80:20 norms, 20 per cent of the imported gold had to be a mandatory export before bringing in new lot.
"We believe the move will do away with the distortions and calm the market which was anticipating some curbs to restrict gold imports," an official said, adding this would help reduce imports. Sources said the 80:20 scheme was ‘working’ as gold imports had slowed, but the shipments surged after certain relaxations were given by then UPA government. The 80:20 scheme was put in place in August 2013 to curb gold imports, considered a major cause for the widening current account deficit (CAD).
The outgoing government in May relaxed the norms and permitted six private sector trading firms to import the gold under the 80:20 scheme. Initially under 80:20 scheme, only state-owned firms and banks were permitted to import. The six private firms, which were given relaxation, accounted for 40 per cent of the total gold imports in April-September, sources said. Gold imports jumped 280 per cent to USD 4.17 billion in October, trade data showed.
India imported 95,673 kg of gold in September, the highest level in the first six months of this financial year. In August, the imports stood at 50,213 kg. Imports of the precious metal in April, May, June and July were 43,207 kg, 52,612 kg, 77,681 kg and 45,269 kg respectively.
