Gold Sales-Gift to Bullion Trade

the government's decision to sell gold from its stocks, both about its objectives and the modalities of its implementation. The Finance Minister referred to the subject thrice in Part B of his Budget speech. One of the references was in the context of export of gold jewellers. The government, he said, would encourage gold jewellery exports ''by allowing importation of gold or by the sale of government gold stocks at international prices". The second reference was in the context of the need to discourage gold smuggling. The big difference between the Indian and international prices of gold provided a strong incentive to smug glers and it had become necessary "to think of economic measures in addition to preventive measures to tackle this evil of gold smuggling". It had been, then-lore. "decided to commence the sale of gold from stocks held by government". Unlike for jewellery export, in this instance there is no commitment to sell gold at international prices. However, it is implicit in the Scheme that the sales would be at below the present Indian price since the objective is to discourage smuggling by bringing the Indian price of gold closer to the international price. Finally, the Finance Minister also stated towards the end of his speech that the budgetary deficit of Rs 1.050 crores "will be reduced by the receipts front sales of government gold", suggesting there by that gold sales were also contemplated as a revenue- raising measure.