Indian Government Seeks to Quell Panic: “No Plan to Restrict Gold Holdings”
Amid increasing social unrest, a collapsing currency (against the dollar), and an economy at a standstill, there has been another growing fear in India—a gold import ban.
This has sparked panic buying of the precious metal, sending retail premiums soaring. In an effort to calm the situation, the Indian finance minister has said the government is not considering plans to restrict gold holdings of individuals.
Parliament was adjourned after an uproar over the currency ban of 500 and 1,000 rupee notes, and the opposition organized an all-India protest, as it is now united in opposing the ban.
The situation is forcing the government to continually issue new ad hoc decrees in order to stop people from successfully fighting the edict.
There is speculation that gold may be next to be banned by the government. If it can ban certain banknotes, surely it can also enact a ban on gold imports? An outright ban on gold ownership seems unlikely, as that would probably cause more than just an uproar.
Also, some of the largest gold hoards are held by temples; in other words, the country’s religious establishment would undoubtedly be less than amused.
To calm these fears, a top finance ministry source said that the government is not considering any proposal to restrict gold ownership by individuals. Following the demonetization of 500 and 1,000 rupee notes in a bid to crack down on black money, the people were apprehensive that the government might impose some kind of restriction on gold holding by individuals.
There was no official denial of any proposals to impose a gold import ban.