World Gold Council said hike in import duty on gold will not be effective in the long run as this is likely to lead to demand being met through unauthorised channels
World Gold Council (WGC) today said hike in import duty on gold will make the precious metal expensive, while cautioning that curbing supply will not be effective in the long run as this is likely to lead to demand being met through unauthorised channels.
“The hike in customs duty on gold from 6% to 8%... is yet another step to limit supply of gold by making it more expensive. Almost all of India’s gold demand is met through imports and this hike will increase the cost of gold for retail customers," WGC India managing director Somasundaram PR said in a statement.
He acknowledged that large current account deficit is unsustainable and needs to be checked, but said that there were number of factors which influence the current account deficit in India and gold is one of them.
“The nature of demand at the retail level is such that restricting supply will not be effective in the long run and is likely to lead to non-transparent price premiums in the market and demand being met increasingly through unauthorised channels which will not be positive for either the economy or for society,” Somasundaram said.
WGC India chief said that demand for gold, whether in the form of jewellery or investment (bars and coins), is driven by millions of individuals investing as part of their household savings and is not discretionary spending for consumption.
“People buy gold as a long-term investment to protect their wealth and gold also has huge significance socially, emotionally and economically in India,” he observed.
Highlighting that India is a significant stakeholder in the gold market with over 20,000 tonnes in the hands of millions of people, Somasundaram advised that policy direction should view gold as a strategic investment asset for India.
“...the long-term policy objective must be to monetise the nation's gold stock to support economic growth,” he added.
Late last night, the government increased the customs duty on gold from 6% to 8%. This is the second hike in the duty in six months as gold imports touched an alarming 162 tonnes in May.
According to WGC data, India imported 860 tonnes of gold in 2012 calendar year. During January-March of 2013, the country imported 215 tonnes.
As per the minimum public shareholding norms, government-run companies shall have a minimum public float of 10% by August and private sector companies had to bring down promoter stake to 75% by 3rd June this year
The Securities and Exchange Board (SEBI) on Thursday said the government has assured it that the public sector units will meet the August deadline to bring down their promoter stake to 90%.
“I have been assured by the government that they will follow the deadline,” SEBI chairman UK Sinha told reporters on the sidelines of the Skoch banking summit in Mumbai.
As per the minimum public shareholding norms, government-run companies shall have a minimum public float of 10% by August and private sector companies had to bring down promoter stake to 75% by 3rd June this year.
Currently, there are about 11 PSUs in which the government holds over 90% stake. These include MMTC, HMT, National Fertilizers, Neyveli Lignite Corporation, RCF, State Bank of Mysore and STC.
Despite giving three years to the private sector companies to reduce promoters stake, as of 3rd June, there were as many as 105 companies which failed to meet the deadline forcing SEBI to take punitive actions against them.
On retail participation in the secondary market, Sinha said this is not at a level to be very happy about. “We had a requirement that promoters must have less than 75% shareholding in a company.
"In spite of three years of time being given, while a large number of corporates followed our guideline, over 100 of them for some reason or the other could not do that. Very reluctantly SEBI had to take action against them two days ago,” he said.
Stating that higher public shareholding and faith in diversified ownership and governance is important, he said "we believe if these things are implemented and followed, it will generate a lot of trust in the market.”
Sinha further said, “The country ranks 132 out of 185 for doing business. Some parameters of the financial sector are not doing badly. In protecting the interest of investors we rank 49 and in financial market development, we rank 21 and we are at 19 in raising equity”.
The risk management system in the country has proven to be very helpful and has been able to generate trust which is required in capital market, he noted.
Mutual funds have seen higher inflows. In 2012-13, “we saw net inflow increase of 100 bps in flows from beyond top 15 cities”.
FIIs in this calendar year have poured $20 billion and in the past two months it stood at $7 billion, reflecting their faith in our markets, he said.
However, he expressed concern about the quality of corporate governance and said: “we have come out with a discussion paper on corporate governance and our belief is that unless we are able to generate confidence in the market ecosystem, retail investors will leave or stay away from the market,” Sinha said.
A breakdown of the key proposals, and the debate they are stirring on Capitol Hill
When the Senate Armed Services Committee held a hearing on the U.S. military’s sexual assault crisis, lawmakers grilled Army, Navy, Air Force and Marine officials on the alarmingly high number of rapes and other sexual abuses in their ranks.
Political momentum to address the problem has been building since the Pentagon released statistics last month showing that sexual assault increased by 35 percent between 2010 and 2012. The outcry grew louder when a string of scandals came to light, including alleged sexual assaults by Army and Air Force officials who were in charge of preventing sexual abuse.
Senators have rushed to draft legislation to hold attackers accountable and provide support for victims. But at the Senate hearing, officials steadfastly opposed most major changes in the way sexual assault cases are prosecuted. “It will undermine the readiness of the force ... [and] will hamper the timely delivery of justice,” said Army Chief of Staff Ray Odierno.
Here’s a rundown of key congressional proposals and what the military is saying about them.
1. Stop giving military commanders the final say on rape convictions
Under the military’s criminal procedures, commanders have clemency powers, which means they can dismiss military court convictions “for any reason or no reason.” The policy came under fire this spring when Air Force Lt. Gen. Craig Franklin overturned a jury's ruling that Lt. Col. James Wilkerson, a fighter pilot, was guilty of aggravated sexual assault. Another official, Air Force Lt. Gen. Susan Helms, was blocked from a promotion in May for throwing out a captain’s sexual assault conviction without any public explanation.
In April, Defense Secretary Chuck Hagel voiced support for stripping commanders of this power. Under Hagel’s proposal, commanders could still reduce someone’s sentence but would have to submit a reason in writing. Sens. Claire McCaskill, D-Mo., and Barbara Boxer, D-Calif., have called for similar changes. Rep. Jackie Speier, D-Calif., introduced a House bill that goes further, removing a commander’s authority to overturn or reduce a judge’s sentence.
Military officials are open to reforming the policy, though they say the Wilkerson case inflated outrage over a rarely-used power. Sen. Lindsey Graham, R-S.C., a member of the Armed Services Committee and former Air Force lawyer, has been the only lawmaker to speak out against the proposed change in policy.
2. Have lawyers determine which assault cases are credible — not the defendant’s boss
Sen. Kirsten Gillibrand, D-N.Y., has called for the most major shift in how the military tries sexual assault cases. Now, commanders decide which cases are investigated and prosecuted, and which are thrown out. Gillibrand’s bill proposes giving independent military prosecutors that power for sex crimes and other serious charges. Commanders have an incentive to ignore rape allegations, advocates of the change say, because it reflects poorly on their leadership.
Military officials are strongly opposed to such a change in authority. “The consequences of such a decision would be ... extraordinarily damaging to the nation’s security,” Army Gen. Martin Dempsey wrote in a letter to the Armed Services Committee chairman, Sen. Carl Levin, D-Mich. The change would “undermine good order and discipline” by sending a message that commanders “cannot be trusted,” Dempsey said.
3. Make sure a sex crime conviction means losing your job
Sen. McCaskill has led a bipartisan effort to require that anyone convicted of “rape, sexual assault, forcible sodomy, or an attempt to commit any of those offenses” be dismissed or given a dishonorable discharge.
At the hearing, McCaskill argued that a soldier’s job performance shouldn’t be a factor in deciding whether to move forward with sexual assault cases. Currently, commanders may consider it when deciding whether to prosecute. “The facts of a felony are the facts of a felony,” McCaskill said. “I don’t care how good a pilot it is.”
Lt. Gen. Richard C. Harding of the Air Force argued during the hearing that a defendant’s character should be relevant in determining the case but should not have “overriding weight.”
4. Scrutinize officers appointed to prevent sexual assault
In the past month, there have been not one but two instances of soldiers working in Sexual Assault Prevention and Response offices charged with sexual assault. The chief of the Air Force’s prevention office was arrested last month for groping a woman. A week later, an Army sergeant working as a sexual assault program coordinator was arrested on multiple accusations of sexual abuse and for running a prostitution ring.
Hagel immediately demanded that all officers in the services’ Sexual Assault Prevention and Response branches be retrained, rescreened, and recredentialed. Since then, Sens.
Jeanne Shaheen, D-N.H., and Deb Fischer, R-Neb., have introduced a bill that would elevate those jobs to a higher status, requiring stricter screening and more certification. In a letter to Secretary Hagel, Shaheen and McCaskill wrote that “In many cases, no interviews are required, and the commander plays a hands-off role in choosing who will perform those duties.” The bill would require a commander to pick someone for the post.
5. Make it easier for sexual assault victims to access disability benefits
While the Senate was hearing testimonies by military officials, the House unanimously passed legislation to increase access to disability benefits for sexual assault victims in the military. Veterans battling military sexual trauma face a higher burden of proof than those with post-traumatic stress disorder, or PTSD. And because most sexual assaults go unreported, there is often little evidence available. Under the proposed law, veterans would only have to show they were diagnosed with a mental health condition that stems from military sexual assault.
Read our Muckreads roundup of the most important reporting on sexual assault in the military.