Low Current Deficit: More To It Than Meets The Eye

......After the current account deficit went past 5%, the government and the RBI swung into action by raising import duty and restricting imports of the precious metal by mandating minimum re-exports. Gold imports in the July-September quarter fell to 148.2 tonnes from 219.1 tonnes in the yearago period. For the fiscal year, it is forecast to fall to about 900 tonnes from 1,000 tonnes in 2012. The physical gold imports data may be encouraging, but the window for smuggling may be just getting wider. It is not that policy-makers are not aware of it, but may be under the belief that even if smuggling rises substantially, it could hardly match even a quarter of imports through official channels....... 

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