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Below are Views On Budget Expectations - The government may not hike import duty on Gold By Abhishek Bansal, Abans Group

India Budget 2021: 

We do not believe that the government will hike import duty, as the current account balance is in control, and the rupee has appreciated sustainably higher from the April’20 drop. The Government has issued record gold through the sale of sovereign gold bonds, and investors are moving from physical gold to paper gold in record numbers. These are four reasons why the government may not hike import duty on gold-

* India's current account recorded a surplus of $15.5 billion in September 2020, compared with a surplus of $19.2 billion in the previous quarter.

* The rupee, which has rallied to its weakest level above 77, against the dollar in April 2020, just after the lockdown in the country, has now appreciated sustainably to higher levels at 73.02 against the dollar. 

* As per the latest data, the government has issued nearly 58.9 tonnes of gold through the sale of sovereign gold bonds. This is valued at nearly Rs. 29,037 crores and an increase in import duty by 2.5 per cent would result in the appreciation of gold prices, and a loss of Rs. 725 crores to the exchequer. 

* The number of folios (or the total investor base) in gold ETFs rose from 4.23 lakh in December 2019, to 8.87 lakh in December 2020. During the same period, Assets under Management (AUM) rose by Rs. 8,406 crores, or 145 per cent, from Rs. 5,767 crore, to Rs. 14,173 crores

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