The margin for getting gold into India through unofficial channels has increased. This has increased confusion, bringing official imports to virtually a halt and giving room to smugglers to have a field day
It is time the country becomes wary of official import figures. The latest September figures are quite a puzzle. It says gold imports have drastically reduced and oil imports have fallen by six per cent. This is an attempt at window-dressing to cover up the reality of a high current account deficit.
Gold imports through official channels have fallen as the import duty has been increased to almost 10 per cent of the value. However, gold arrivals have not fallen. It is pouring in from all sides — ports, airports, Pakistan, Sri lanka, Bangladesh and Nepal. The glee about falling current account deficit needs to be taken with a grain of salt.
The hawala trade has also got a boost. These are indicators that the Government is unable to manage.It seems the Union Ministry of Commerce and Industry is not stating the truth. Oil imports as per the Union Ministry of Petroleum and Natural Gas figures are coming down every month since April 2013. Some ministry statements say that oil companies are importing only 75 per cent of the ‘need’. It should be good news, but it is actually not.
Normally, such cuts in imports and consequent supply should have created long queues at petrol pumps and raised a hue and cry all over the country. None of the bulk consumers — be it railways, airlines, state transport corporations or goods transporters — has reduced consumption.
So how is the fall in imports keeping the wheels on the moveIJ It raises a moot point: If the country’s needs are being met at that reduced level, the earlier imports were definitely at an inflated level.
This is not the first quarter in which oil import volumes have fallen in recent years. It’s remarkable that apart from these blips, oil import volumes kept on rising in spite of a drastically slowing economy. But oil import volumes stabilised in the January-March quarter and then fell during the July-September quarter.
So, even if it has fallen, it remains at a high of 41 billion barrels — up from 25.3 billion barrels in April 2010. The petroleum companies possibly are still concealing many facts. If the latest trend, as they claim is factual, then the import at this kind of high level is possibly unwarranted. It requires a proper audit of import figures and the actual needs in the country.
The petroleum companies have not been transparent on the issue of pricing and the so-called ‘under recoveries’. The Union Ministry of Finance had raised many questions on these issues since over the three last years. It remains unresolved. The profits of the companies in all these years have been soaring. They are also bleeding the Government by forcing it pledge oil bonds.
Neither oil nor gold should be a comfort. Gold since 1991 was being imported at zero duty. It had virtually put an end to smuggling. It reduced costs on policing. As per the Commerce and Industry Ministry, in May, imports were at 62 tonnes, which halved in June and fell further in the recent months. This is also the time when arrivals through ‘illegal’ routes increased.
As during the past over a year, customs duties increased and other RBI curbs were imposed, gold smuggling has doubled in the April-August period. Jewellery industry players and veteran bullion analysts say since April this year, nearly 60 tonnes of gold has entered the Indian market through smuggling as compared to 30-32 tonnes in the corresponding period of the previous year.
The margin for bringing gold into India through unofficial channels has increased. The Reserve Bank of India linked imports to exports. This has only increased confusion, bringing official imports to virtually a halt, giving room to smugglers to have a field day.
In July, a huge quantity of gold was smuggled in from Pakistan as it allows free imports. later, avenues for smuggling have opened up from Bangladesh. Fishermen from Sri lanka bring it in their boats to dump at other boats or shores. Nepal has also emerged as another route.
Gold arrives in Gujarat, Rajasthan, Punjab, West Bengal, Tripura, Assam and other North-East States. So it does on western coast in Maharashtra, Karnataka, Kerala and in the east in Tamil Nadu. In the April-June quarter of this financial year, seizure of smuggled gold hit Rs 59.82 crore — an increase of 365 per cent over the same period a year ago.
Seizures in 2012-2013 had doubled from the previous year to Rs 99.34 crore. This year, authorities expect it to rise to around Rs 250 crore.Recently, a counsellor of a foreign embassy was caught at Delhi airport with 109 gold stapler pins on his packet. Weighing six grams each, the pins were 754 grams of gold, worth Rs 20 lakh. In another incident, a counsellor-level diplomat travelling from Dubai was nabbed at the Delhi airport, carrying 37kg of jewellery, worth Rs 10 crore.