Gold not the safest bet, no further hike in import duty: Chidambaram.

NEW DELHI: Ruling out any further hike in import duty of gold, Finance Minister P Chidambaram on Thursday said that net gold imports have fallen from an average of $135 million in the first half of May to $36 million in the second half of last month. He added that this should have a positive impact on markets.

According to Chidambaram it is wrong to say that gold is the 'safest investment' option. "It is wrong to say that there aren't other attractive investment instruments," he said. "People who are financially well informed should put their investments in other financial instruments," he added.

"I once again appeal to everyone to resist the temptation to buy gold. This will show positive impact on every aspect of Indian Economy," Chidambaram said.

Chidambaram went on to say that people will invest only when they get a good price on their investments. "People think that they are buying gold in rupees. Actually they are buying gold in dollars," he said. "If for one year there are no gold imports, it will change the current account deficit story of the country" he added.

Seeking to reassure that the panic over rupee's depreciation is unwarranted, Chidambaram said, "Steps have been taken to cure the currency's fall."

"There is concern about the rupee. What is happening in India is not unusual for countries with large current account deficit." According to Chidambaram, the rupee has been 'remarkably stable' over the last ten months.

Reiterating that there is 'no need to panic', Chidambaram said, "Rupee will find its level, we are concerned about the volatility. It is quite possible that rupee will regain losses."

In an attempt to woo investors to invest in the Indian markets and economy, Chidambaram said, "A number of measures have to be taken to revise growth in economy, fiscal consolidation tops list, followed by moderating inflation."

Stating that reviving investments is top priority, Chidambaram said, "After about 9 months we have acknowledgment that steps that we have taken have delivered results." "Reviving investor sentiment will yield results; the world continues to repose faith in India," he added.

While acknowledging that steps taken by the government have had the desired effect, Chidambaram said that the investment climate can benefit from more reforms. Reviving economy, rejuvenating investment sentiment might be slow, but we do not take our eyes off the ball, Chidambaram sought to assure.

"It is not an ODI match, a wicket or a six is expected in every ball in an ODI, economic reforms don't work that way," he said on a lighter note. "We have to take long term view of what is happening in India; results have been achieved; looking forward to more reforms," Chidambaram said. Chidambaram went on to highlight measures that the government will take in order to boost economic growth and contain fiscal and current account deficit. "These will include gas pricing, FDI limits, steps to be taken by SEBI based on Chandrashekhar Committee report, and skill development," he said.

Source : economictimes.indiatimes.com