The leaf of the poor neem is inadequate cover.

In a brave effort to reduce the Current Account Deficit our most revered Finance Minister decided to slash import of gold. He was scathing about the tendency of Indians to buy a useless yellow metal which just sits in bank lockers, earning no interest and with every chance of falling in value, like any other commodity. The import duty on gold was increased in stages to 8% from 2%, banks were barred from allowing gold import on credit, gold could be imported only on genuine orders, banks were asked to reduce sale of gold coins and bars and the RBI asked credit card companies to refuse purchase of gold on Equated Monthly Instalments or EMIs. TOI, 8 July. The measures were highly successful. So successful in fact that import of gold dropped a whopping 81% from 162 tonnes @ $8.4 billion in May to a mere 31.5 tonnes @ $2.5 billion in June. So, there must be high fives and double Patiala pegs in the ministry of finance even at this moment? Er, no. Seems that our jewellery exporters are complaining they are facing a severe supply crunch. India exported $43 billion of gems and jewellery in 2011-12 which was down 9.3% to $39 billion in 2012-13 because of falling orders from western countries facing economic problems of their own. Since our total exports amount to about $300 billion in the entire year this is a significant portion. With the price of bullion falling from around $1900 a troy ounce to around $1200 and the rupee falling against the dollar these companies could be making huge profits. Trouble is that we imported a record 969 tonnes of gold in 2011 and 860 tonnes in 2012. So if gold import is restricted then our jewellery exports fall off while if import conditions are relaxed ordinary people gleefully lap up tonnes of the stuff. Poor fellows. Talk about a rock and a hard place. Of course, what no one wants to admit is that all this is because of policies followed by the Congress. Before the Congress seized power in 2004 India imported gold worth $4.170 billion in 2001-02, $3.845 billion in 03 and $6.517 billion in 04. As soon as the Congress gets power the import bill shoots up to $10.538 billion in 2004-05, $10.830 billion in 06, $16.724 billion in 08, $20.725 billion in 09, $28.64 billion in 10, $33.876 in 11 and $53.4 billion in 12. So, in the 12 years of Congress disaster gold import has shot up from $6.5 billion to $53.5 billion, an increase of $47 billion a year. The prediction is for another record this year. This shows that people have no faith in the government and are hedging against inflation. So, what is the remedy advised by our FM? He is pushing mightily for reduction in interest rates which will weaken the rupee further and add to inflation. When you are naked why bother with a neem leaf.