India’s passion for gold has led to a rise in its current account deficit, which reached an all-time high of 5.4 percent of gross domestic product in the July-September quarter.
Alarmed by the mounting current account deficit, driven by large-scale gold imports, the government raised the import duty on gold and platinum to six percent from four per cent.
The jewellers in eastern Siliguri city were upset with the step.
They said on Tuesday that their business was already running low because of the high prices of gold and this move will put an end to their business, as the poor and middle class people would not be able to afford the yellow metal and the rich class would head to the showrooms.
“The business was already running low because of the high prices of gold and with the rise of import duty, the prices will escalate, which will have a bad impact on the business,” said jeweller Suman Kumar Paul.
The widening current account deficit has increased India's need for foreign capital inflows and evoked memories of the 1991 balance of payments crisis, when the Reserve Bank of India sent 47
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