COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES

Golden Gate: Kerala becoming gateway to gold imports

D Jose in Thiruvanthapuram

Kerala is slowly and steadily emerging as the golden gate of India, thanks to the scheme for the liberalised import of gold by non-resident Indians.

Karipur airport at Kozhikode has already achieved the distinction of being the second largest entry point for gold in India, after Bombay. Customs sources say once the international Nedumbaserry airport in Thiruvananthapuram begins operations later this year, Kerala might top the list.

Though Karipur has only four international flights daily, it accounted for the import of 102 tonnes of gold during 1997-98. Thiruvananthapuram, which has the state's only recognised international airport, accounted for 5.3 tonnes of gold during the same period.

The total imports through both the airports gives Kerala the highest per capita gold import at 3.5 grams. If the precious metal arriving through illegal channels is also taken into account, the per capita consumption will be much higher.

Official sources doubt if the entire gold arriving through Kozhikode and Thiruvananthapuram through both official and non-official channels is consumed in the state itself. They think many of the passengers are only a front, bringing in the gold for other people. The officials believe that a substantial portion of the gold crosses the state's borders and finds its way into other cities. However, there is little the officials can do anything about it since, as per the liberalised scheme, no questions can asked on the disposal of the precious metal.

As per the liberalised scheme, any Indian who has stayed abroad for a minimum of six months can import up to 10 kilograms of gold on his return, paying only Rs 22,000 per kilogram as customs duty. The income tax personnel, whose duty it is to ascertain the financial whether the passenger has the capacity to purchase the gold, say they are not equipped to undertake the task. The sales tax machinery in the state also has the same problem.

The import of the yellow metal through Kozhikode, since it was legalised in February 1992, had shown a steady increase. In 1992-93, 14 tonnes was imported. This went up to 30 tonnes in 1993-94, 60 tonnes in 1994-95, 67 tonnes in 1995-96, and 84 tonnes in 1996-97. The figures for the Thiruvananthapuram airport were: 1992-93 -- 10.37 tones; 1993-94 -- 2 tonnes; 1994-95 -- 3.72 tonnes, 1995-96 -- 3.2 tonnes, and 1996-97 -- 3.5 tonnes.

The bulk of the gold is brought into the state by Keralaites returning from the Gulf countries where many persons from the state are employed. The state's northern region, in and around Kozhikode, has the highest number of expatriates working in the Gulf countries.

Although Kozhikode is a domestic airport, Indian Airlines operates four flights to different Gulf destinations in view of the large traffic. The airport has netted more than Rs 8.3 billion by way of customs duty from gold alone after liberalisation.

Customs sources are confident of a further increase in revenue after the commissioning of the Nedumbaserry airport, as they believe it will divert traffic from Bombay and and Delhi airports.