| The removal of the 80:20 rule comes with the implicit admission that government regulation is powerless to modify gold consumption patterns. Last week, the government removed all restrictions on the import of gold. Along with this, government officials were quoted in news stories saying that the removal of curbs would do away with distortions in gold import.
As things stood before the relaxation, final gold consumption in India was said to be at around the same level it was before the restrictions began. Even though the curbs helped control the apparent current account deficit, it had no impact at all on the ultimate source of the gold problem, which is the actual gold consumption. All it appeared to have done was to create problems for gold exporters...............................................Full Article: Source
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