........Tarapore Committee on capital account convertibility also recommended in 1997 that it was essential to liberalise the import of gold. WTO did not ask us to liberalise the import of gold. Even the IMF, which was a strong advocate of full convertibility, chastened by empirical experience, started to soft- pedal the issue. But those were the heady days of market theology in India. Even when gold imports were modest, at about $ 5 billion, I had warned that liberalizing gold imports was a blunder and alas, the warning has proved to be prophetic. A poor country, which continues to be the abode of the largest number of underfed and undernourished persons in the world, cannot afford to definancialise and invest enormous unproductive asset like gold. At long last, wisdom has dawned on the RBI. If left unchecked, gold imports would play havoc with the economy, disrupting growth. Dr. K. U. B. Rao, chairman of the RBI Working Group, should be congratulated on assembling a mass of data on related issues and providing an excellent analysis of the issues involved. I am sure the report will remain as the standard reference work on gold for years to come........
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