This refers to the editorial “A year of weakness” (January 2). Increasing import duty on gold is a retrograde step and will leave scope for black market operators. The most effective step will be to demolish people’s blind belief that gold is the most secure investment against high inflation. India needs to increase the supply of gold, say 750 tonnes, to the international markets to stabilise the prices, since Indian imports are the key drivers of the price rise. Even if two per cent of the gold holdings with the public can be garnered through an attractive scheme for exporting, the government will be able to influence the international prices. A gold bond scheme that offers the lowest of the market value of gold or an inflation-adjusted assured return can easily attract the public, and accumulating gold stock for export will not be difficult.
C V Sajan New Delhi
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