Lok Sabha Question No. 1068 (UNSTARRED), answered on 2024-12-02
Subject: Increase in Gold Prices
Ministry: FINANCE
Asked by: Shri Manickam Tagore B

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 1068 TO BE ANSWERED ON 02.12.2024

## Increase in Gold Prices

## 1068. SHRI MANICKAM TAGORE B:

Will the Minister of FINANCE be pleased to state:

- a) whether  the  Government  has  taken  any  measures  to  regulate  gold  prices  and  prevent artificial inflation;
- b) the  manner  in  which  the  Government  plan  to  support  consumers  affected  by  the  40% increase in gold prices during the last year;
- c) whether the RBI continues to purchase gold despite the rising prices and if so, its impact on the common man;
- d) the  Government's  stance  on  reducing  import  duty  on  gold  to  ease  the  burden  on consumers;
- e) the manner in which the Government will ensure transparency in gold pricing and prevent cartelization;
- f) the  steps  to  be  taken  by  the  Government  to  promote  alternative  investment  options  for consumers seeking safe-haven assets;
- g) whether  the  Government  has  assessed  the  impact  of  gold  price  hikes  on  the  wedding season and festive demand; and
- h) whether  the  Government  has  any  plans  to  consider  implementing  price  controls  or subsidies to mitigate the effects of gold price increases?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a) & (b): The government had reduced the customs duty on gold imports from 15 per cent to 6 per cent in the Union Budget 2024-25.

(c) As per the RBI Act, 1934, the business of the Reserve Bank of India (RBI), inter alia , includes  the  purchase  and  sale  of  gold  coins  and  bullion.  Gold  is  a  part  of  the  foreign exchange  reserves.  In  US  dollar  terms,  gold  was  7.81  per  cent  of  the  foreign  exchange reserves  on  March  31,  2023  and  8.15  per  cent  on  March  31,  2024.  This  change  is  due  to valuation  changes  in  addition  to  acquisition.  RBI's  purchases  of  gold  are  mostly  in  the international markets and have no significant bearing on the domestic market.

(d)  Import  duty  on  gold  was  reduced  from  15  per  cent  to  6  per  cent  in  the  Union  Budget 2024-25, to enhance domestic value addition in gold and precious metal jewelry and make gold more affordable for consumers.

(e)  The  Bureau  of  Indian  Standards  ensures  purity  of  hallmarked  jewelry,  which  helps  in maintaining transparency and consumer trust. The Competition Commission of India (CCI) enforces Competition Act, 2002 to prevent anti-competitive practices, including cartelization. Under  the  Act,  the  CCI  takes  appropriate  action  as  and  when  any  complaint  is  received regarding cartelisation practice.

(f) The scope for investment in financial assets has increased substantially in the recent years. The financial sector regulators undertake various investor education and awareness activities on investment opportunities in various financial instruments.

(g) & (h): While the Government is monitoring the gold prices carefully, it has not done any specific assessment of the impact of gold prices on festive demand. The government has not announced any specific plans for implementing price controls or subsidies for gold.

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