How Temple Gold Can Save Indian Economy From Crisis?

One of the measures to bring down current account deficit which has surged to a record high of $88.2 billion, or 4.8 percent of the country’s GDP, is to lower gold imports. The Finance Minister, P. Chidambaram plans to bring down the CAD to 3.7 percent of GDP in the current fiscal year by limiting import of non-essential items like gold, silver, oil and so on.  However few analysts believe that buying gold from temples is a sensitive matter and that it won’t help reduce CAD.

The gold imports in India are estimated to be about $48 billion every year. In 2012, India imported about 860 tonnes of gold, but with the recent hike in import duty, it is expected to come down to 400 tonnes in 2013-14. The reduction in imports would in turn lower CAD and help step up the economy.

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