Lessons from the Raj: Whether it is gold or salt, higher duties don't work

The problem of gas in Europe, oil in the US and gold in India is a lifestyle problem. High taxes and import duties aren't going to solve it

The government recently increased the import duty on gold from 10.75 per cent to 15 per cent. It has done this to check the current account deficit, which has been rising alarmingly.

Gold imports have risen massively over the last 14 months. In May this year, 107 tonnes gold was imported, and imports were also massive in June. The May surge was nearly 800 per cent. There is no rational explanation for this.

But among the many side effects has been increasing pressure on the rupee, which has been depreciating rapidly against the dollar, forcing the Reserve Bank of India (RBI) to