AIGJTF condemns reopening of Reliance Gold Savings Fund

Reliance Gold Savings FundThe All India Gems & Jewellery Trade Federation (AIGJTF) has condemned the reopening of Reliance Gold Savings Fund for fresh investments.

Led by billionaire Anil Ambani, Reliance Gold Savings Fund on Wednesday announced that it had restarted accepting subscriptions. The private-sector Fund, which manages nearly $300 million, had shut off new buy-ins nearly three months back to support the government's efforts to curb soaring demand for gold.

Justifying the restart of the Fund, Reliance Capital Asset Management CEO Sundeep Sikka said India's economic conditions are improving and the U. S. dollar is coming down.

But, All India Gems and Jewellery Trade Federation's director Bachhraj Bamalwa argued that the decision could lead to increase in gold imports, which in turn again force the government to impose further restrictions.

Speaking on the issue, Bamalwa said, "With the restart of this gold fund (by Reliance Mutual Fund), demand for physical gold will increase. They should not have restarted at this critical moment. If this increases imports, government may be forced to impose further restrictions."

India is one of the biggest importers of gold, which played a key role in pushing the country's current account deficit (CAD) to a record high of 4.8 per cent of GDP last year. The government took many harsh measures, such as hiking import duty of the precious yellow metal to 10 per cent, to arrest gold imports. The measures showed results, and gold imports slipped from 162 tonnes in May to just 7 tonnes in September this year.