Government Acts to Ease Impact of Gold Price Surge on Consumers
In a bid to address concerns over the steep 40 per cent rise in gold prices over the past year, the government has taken significant steps, including a reduction in import duty on gold. The customs duty was slashed from 15 per cent to 6 per cent in the Union Budget 2024-25, aimed at lowering costs for consumers and boosting domestic value addition in the jewellery sector.
Responding to a Lok Sabha query, the Finance Ministry clarified that while the Reserve Bank of India (RBI) continues to purchase gold as part of its foreign exchange reserves, these acquisitions are predominantly conducted in international markets and have minimal impact on domestic gold prices. The share of gold in India’s foreign exchange reserves rose slightly, from 7.81 per cent in March 2023 to 8.15 per cent in March 2024, attributed to valuation changes and acquisitions.
While there is no immediate plan to implement price controls or subsidies, the government acknowledged the importance of monitoring gold prices and their effect on consumer demand during festive and wedding seasons. The reduction in import duty, along with robust regulatory measures, is expected to provide relief to consumers and support the broader economy amidst fluctuating gold prices.
Source: https://kashmirlife.net