Here’s some news that will bring cheer to the gem and jewellery trade as well as their customers. The Centre has withdrawn the so-called “20:80 scheme” and restrictions placed on import of gold.
Apparently, the comfortable position on the current account deficit front and healthy build up of foreign exchange reserves prompted the move. Further, rise in smuggling of gold and loss of revenue to the exchequer due to this could also have led to withdrawal of the scheme as well as removal of restrictions on gold imports.
Great move by Centre to relax 80:20 rule. More supply will stop hoarding. Imports and smuggling will fall, exports will rise.
— lokeshwarri sk (@lokeshwarri)
>November 29, 2014Entities involved
Under the “20:80 scheme”, nominated banks /agencies/ premier or star trading houses/ special economic zone units/ export-oriented units were required to ensure that at least 20 per cent of every lot of gold imported into the country is exclusively made available for the purpose of exports and the balance for domestic use.
The scheme was introduced in July 2013 to rationalise the import of gold in any form/purity, including import of gold coins/dore into the country as the country’s current account deficit surged to 4.8 per cent in the April-June 2013 quarter. With all the restrictions imposed on import of gold in 2013 going, gold prices could thaw, say market experts