New Delhi: Finance Minister Pranab Mukherjee on Sunday bluntly told bullion dealers, who have gone on strike against the levies on gold, that their pressure tactics "will simply not not work".
Mukherjee in his budget proposals has doubled the basic customs duty on standard gold bars to 4 per cent and non-standard gold to 10 per cent. He has also imposed a one per cent excise duty on unbranded jewellery.
"I did it deliberately," he told in an interview when asked about the three-day strike by bullion dealers across the country to protest the levies.
He explained that in two consecutive years about $90 billion of precious foreign exchange was used in importing gold making it the second biggest item of import after oil.
The Minister pointed out that people in India were "crazy" for gold because they invest either in real estate or this metal feeling that their value would go up.
It has also become part of Indian culture and in the south some political parties have decided to give free "mangal sutra", a piece of gold given to brides.
Rejecting the argument of bullion dealers that the levies would encourage smuggling, the Finance Minister said that import duty of up to five per cent did not not encourage smuggling. He had kept it only at 4 per cent and had no no intention of increasing it further.
Asked about the strike by the dealers, he replied, "if they think they will put pressure, it will simply not not work."
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