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Money Aug 27, 2012

Indians invested too much money in gold: CII

Bangalore: Investors in mutual funds and equity should get better incentives so that Indians do not invest much money in gold, industry body CII said today.

Gold imports in 2011-12 were to the tune of $60 billion, which also contributed to deterioration in the country's balance of trade, CII president Adi Godrej told reporters in Bangalore.

Precious possession. Reuters

"We need to balance our trade better," he said.

The government is planning and CII is fully supportive of better incentive for investment in mutual funds and equity so that people do not invest that much money in gold which could also help in improving balance of trade.

Pushing for early implementation of the GST regime, he said it would be the single most important reform and help reduce fiscal deficit, contain inflation and get the country back on a high growth path.

Godrej said some states are growing at double digits and others need to emulate them. "If some states can grow at double digits, there is no reason why other states can't and also why the country can't."

"We should revive growth through reforms and governance," Godrej, who is also chairman of the Godrej Group, said. "There must be better governance".

The institution of Lokpal which could expose and punish the cases of corruption is necessary but not sufficient to improve transparency and curb corruption, he said.

"What's also needed is that government procedure should be simplified," Godrej said as he vouched for e-governance which would lead to "less corruption, more transparency".

Godrej said the general investment climate in India is not good and the reasons for it include "retrospective amendments that came in the budget" and labour unrest at the Maruti Suzuki plant at Manesar.

He hoped the current slowdown in the economic reforms process was a "cyclical phenomenon" and not a "system problem". "Momentum of reforms has suffered. The climate for both Foreign Direct Investment and domestic investment have been negatively affected".

Asked about disruptions in Parliament over the coal block allocation issue, Godrej said, "We do think Parliament should run normally. Parliament should operate."

"There might be various accusations; there could be various reports. CII feels they should be debated in Parliament," he said. "If Parliament doesn't work, then the various pieces of legislation that are pending in Parliament will get delayed," he added.

Gold touched a record price of Rs 31,400 today.

PTI


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