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'Govt working on investment options to check gold buying'

business Updated: Aug 04, 2013 04:02 IST

In a bid to bring down import of gold, the government is working on more attractive investment options to dissuade people from buying the metal, a senior finance ministry official said on Saturday.

"We should create more attractive instruments which provide people an alternative source of investment than gold. And I think, we are working on those," said chief economic advisor in the finance ministry Raghuram Rajan at a function in Chennai.

The government recently launched inflation indexed bonds with an aim to ensure better returns to inventors.

"As the economy starts doing better, more of these instruments will look more attractive. Equities look more attractive, fixed income will look more attractive as inflation comes down. That will take off some of the hunger for gold as an investment," Rajan added.

Both government and RBI have been taking steps to curtail import of gold, which is mainly responsible for India's high current account deficit (CAD).

Referring to controversy over the poverty line figures, Rajan said: "I think the point really is wherever you draw that line what is important is large number of people have (already) crossed. Won't you want more of our people to have the resources to do what they want."

The planning commission's poverty line which says persons are not poor if their daily consumption of goods and services exceed Rs 33.33 in cities and Rs 27.20 in villages, has generated a lot of controversy.