The Truth About Gold And The Current Account Deficit
March 13, 2013 5 Comments
Our government would have us believe that it is the insatiable appetite of Indians for gold that is at the bottom of our balance of payment problems.Here is the truth and the figures have been put up by the RBI not any advocacy group with an agenda!
The net impact on trade deficit due to the domestic demand of gold is estimated at 0.3% of GDP. It is not perceived to be very significant. However, reducing this could bring down the current account deficit (CAD) — which reflects the gap between domestic savings and investments.
So how about some truth?Anybody for fiscal consolidation?Cutting down on wasteful government expenditure?Can we start out by ensuring that government servants opt for basic vehicles not glam ones and ordinary phones not Apple models,when these are bought out of government money?How about an audit of where exactly our subsidies have gone and who exactly has benefited from them?How about a little less corruption in government?As one stalwart put it why not a more tolerable level of corruption rather than the dacoity killing our economy?