Nilesh Shah, MD and CEO of Kotak Mahindra AMC, has advised Finance Minister Nirmala Sitharaman to monitor the import bill of Gold. In a program of CNBC-TV18, he said that it is necessary to monitor the import bill of gold after the custom duty decreased in the budget and in view of the bounce in international prices. He predicted a rise in gold prices. He said that from the initial signs it seems that we are importing 700 tonnes of gold. This is equivalent to about $ 35-40 billion.
Fear of increasing imports due to reduced import duty
Finance Minister Nirmala Sitharaman announced to reduce import duty on gold. In view of this, Shah said that it should not happen that our expenses on gold imports will be higher than the expense of oil imports. In the budget presented on July 23, the financial minister reduced the basic custom duty on gold from 10 per cent to 6 per cent. He also reduced the Agriculture Infrastructure and Development Cess (AIDC) from 5 per cent to 1 per cent. Due to this, the total tax on gold has come down from 18.5 per cent to 9 per cent (including GST). The Finance Minister also reduced custom duty on silver to 6 percent in the budget. It has been reduced to 6.4 percent at platinum.
There is a lot of money spent every year on import of oil
India fulfills its 88 per cent needs of crude oil with imports. In the financial year 2023-24, $ 121.6 billion oil and gas were imported in the country. It is less than $ 144 billion a year ago. However, India’s dependence on imported oil in the last financial year increased to 87.7 percent. It was 87.4 percent a year ago.
Gold price fell 15 percent this year
India is ranked first in the world in terms of gold imports. India fulfills the entire need for gold from imports. On the day of the budget appearing, on July 23, the prices of gold declined. It fell from Rs 72,875 per 10 grams on July 22 to Rs 69,269 per 10 grams on 23 July. However, experts say that the prices of gold may rise further. This year, gold prices have fallen by about 15 percent.
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Government should disinvest in government companies
Shah said that the pressure on gold will increase gradually, but it needs to be monitored. Actually, due to reduced tax, people’s interest in buying gold in the country may increase. On the other hand, in the case of disinvestment in government companies, Shah said that the government should sell its stake in government companies whose shares have low float. This has increased the prices of shares significantly. Increased supplies of shares can soften the prices.