Gold illogic

In his landmark 1992-93 Budget, Finance Minister Manmohan Singh dealt a body blow to gold smuggling by permitting Indians returning from abroad to bring in 5 kg of the yellow metal and making the rupee partially convertible. With the rupee allowed to float freely and gold imports further liberalised, with Customs duty lowered to just Rs 220 per 10 gm, the hawala premium for dollars and their diversion to smuggle the yellow metal ceased.

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