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2)Discuss the reasons behind the recently witnessed sharp surge in illegal gold imports in India.(250 words)

Topic-Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

2)Discuss the reasons behind the recently witnessed sharp surge in illegal gold imports in India.(250 words)

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Why this question

Gold is a highly valued and sought out commodity which also acts as a easy to manage and highly liquid reserve of wealth. Indian is the second largest consumer of Gold and gold smuggling has been a perennial problem in India. However, recently there has been a sharp spurt in the cases of illegal smuggling as well as some decrease in gold imports.

Key demand of the question.

The question wants us to discuss in detail about the recently witnessed increased incidences of gold smuggling and bring out the reasons as to why this is happening and what are the reasons behind this phenomena.

Structure of the answer

Discuss- This is an all-encompassing directive which mandates us to write at length about the key demand of the question and bring out a complete picture of the issue in hand.

Structure of the answer

Introduction– Write a few lines about India’s gold consumption, imports and the recently witnessed sharp spurt in cases of illegal import of gold along with decreased imports (legal) and consequent revenue losses.

Body-

Bring out the role of introduction of GST as a different regime on gold imports- both legal and illegal. Discuss how introduction is responsible for the observed phenomena. E.g GST exemption on purchase of old gold jewellery from an unregistered individual under which the gold jeweller can import gold through illicit channels and show that in his books as purchase of old gold and evade tax; complicated structure and many compliance requirements which forces migration to alternate (including illegal) routes; a strong American economy and a hike in interest rates by the US Federal Reserve made the US dollar stronger etc.

Conclusion- Form a fair, concise and a balanced conclusion on the above issue in the form of a way-forward- like a comprehensive and effective tracking system, popularizing other instruments of wealth, curbing illegal imports through stronger and better intelligence gathering etc.

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