This is with reference to the observations made by the RBI Deputy Governor, Dr K.C. Chakrabarthy, in “Curb offering gold to God, or as dowry” (Business Line, July 22) . The first will hurt the sentiments of the devotees, as the offerings to God should be the best, according to Hindu mythology. Second, dowry is a social evil. The RBI can speak with data in hand. But the common man is aware that large-scale purchases are made by the wealthy to divert unaccounted money. The Government came out with good tax strictures on gold sale but had to sulk under pressure from bullion merchants, who initially downed their shutters, only to open it later for fear of business loss during Akshaya Tritiya. . Subsequently, the Government withdrew all stringent levies. The best way to curb gold purchase is to bring all purchases, irrespective of the value, under the tax net. The RBI has rightly observed that there is no intrinsic value for gold. It can perhaps resort to market intervention by purchasing gold, which can have a stabilising effect.
- S. Veeraraghavan Madurai (HBL)
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