Topic:Government policies and interventions for development in various sectors and issues arising out of their design and implementation. Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
4) With India at the heart of a web of the illicit trade of gold, and threads spanning the globe and almost certainly financing conflict and corruption, Discuss how the authorities must take action to remove incentives for gold smuggling and ensure the gold industry implements due diligence. (250 words)
Why this question:
International non-government organization IMPACT, in its latest report, has said that India has become one of the largest gold smuggling hubs in the world. It is headquartered in Canada.
Key demand of the question:
Highlight the issue of illegal Gold trade and explain how it leads to conflicts and corruption in the country. Discuss the concerns and methods to address the issue.
Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.
Structure of the answer:
In brief discuss the current situation highlighted by the report.
Explain the following aspects :
Gold possibly tied to conflict, human rights abuses and corruption in Africa and South America is entering legal international markets through India, said IMPACT, in a statement.
Actors across India’s gold industry are failing to do proper checks on where gold comes from to ensure it’s not financing conflict and human rights violations.
The report said that one-third of the world’s gold passed through India, identifying three primary factors for smuggling: tax breaks, falsified origin documents and complicit allies.
To boost India’s refinery sector, the government had introduced tax breaks in 2013 for unrefined gold. According to the report, this led to traders covering up questionable provenance claims by falsifying documentation to take advantage of lower taxes. The import of unrefined gold shot from 23 tonnes in 2012 to over 229 tonnes in 2015.
Conclude by suggesting way forward.