After its `surgical strike’ on demonetization of higher value notes, Narendra Modi’s government is said to be preparing for another major strike against domestic holdings of gold. It may be recalled that Prime Minister has been stating repeatedly that this is the only first step and many more severe steps are ahead.
Already many critics are stating that demonetization may succeed in creating hype, but not helping to unearth vast volume of black money, as most of hoarders are investing such money in gold and real estate, but hardly kept with them in cash farm. According to reports of Income Tax (IT) department in their raids conducted in last couple of years, only 6 per cent of seizures contain cash and remaining portion are in the form of gold, lands and shares.
Immediately after demonetization move, gold premiums have jumped to two-year highs in the country as most of jewellers ramped up purchases on fears of government might restrict imports. A day after demonetisation of higher value notes, the IT department has conducted surveys on jewellers and suspected hawala operators across several parts of the country.
The surveys by the tax department were aimed at plugging loopholes being exploited by several black money holders to get rid of scrapped notes. India is the world’s second biggest gold buyer. The officials are estimating that black money is being paid for over one third of its annual demand that comes up to 1,000 tones. Now, the government is considering to scan higher gold purchases and also may state PAN or Aadhaar cards are mandatory for such purchases.
