From the India Times (click here):
"Directorate of Revenue Intelligence (DRI) had last year recorded a record 800% increase in gold smuggling. This has led to fears of more black money getting infused into the economy as increased import duty and other restrictions are put on gold. 'The government is less concerned about black money as it is concerned about rising CAD [Current Account Deficit]. Black money in any case is not being accounted into the economy. Government would rather have white money shift away from gold to give a spurt to economy,' said a DRI official."
The whole article about increased gold smuggling into India is worth reading but that quote at the end of the paragraph is a real-admission giving a clear window into the Indian G-Man and what's really going on. Here's my takeaways:
- "last year recorded a record 800% increase in gold smuggling." - how does the India government gauge how much gold is being smuggled? This can't be accurate. The takeway here is: Because of gold smuggling, don't believe any official numbers about Indian gold imports any more.
- "The government is less concerned about black money as it is concerned about rising CAD [Current Account Deficit]." - this tells you a lot about how governments think about economic statistics. All politicians care about is looking good. They don't care about how the economy is actually doing. If the same amount of gold is imported, but now it is being smuggled, the real "Current Account Deficit" is unchanged, but the "official" Current Account Deficit gets better because the money leaving the country in the smuggler's pockets isn't officially counted. The Indian G-Man would rather have phoney numbers make them look good than for the government to get the tax revenue that is being lost because of smuggling. Compared to looking good, the G-Man doesn't give a rip about organized crime either.