Estimated to shoot up by 76 per cent in the current fiscal to $58 billion, India's gold import may decline sharply to $38 billion in 2012-13 on back of improved economic situation, PMEAC said.
The decline in gold imports next fiscal, the Prime Minister's Economic Advisory Council (PMEAC)'s economic report said, would be on account of improvement in economic situation which would encourage people to invest in financial assets like mutual funds and insurance.
"The stabilisation of basic macroeconomic conditions at home is expected to curtail the demand for imported gold to be held as an asset by Indian households," PMEAC Chairman C Rangarajan said.
The report projects the gold import bill for the next fiscal at $38 billion.
The increase in import of the yellow metal is attributed to investors buying the precious metal to hedge against high inflation.
"Going ahead I believe inflation rate will come down and if rate of return on financial assets becomes attractive then we might able to reduce import of gold," he said adding that the import to revert to the previous year's level of $32-33 billion.
The best means of limiting the appetite for gold is to work towards making other kinds of assets more attractive, he said.
"...make investment in life insurance and mutual fund schemes at least as attractive, as was the case till March 2010," the report said.
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