NEW DELHI: In an unprecedented action India has sold 20 tonnes of confiscated gold worth 200 million dollars (Rs400.crores) in Zurich to tide over the foreign exchange crisis inviting strong criticism from various political

An official spokesman said the gold had been sold with a repurchase option by the State Bank of India without affecting gold reserves of the country.

The transaction is complete the spokesman said when pressed by reporters to specify the period of sale and whether more gold was likely to be sold in the international market.

The Congress (I) the Bharatiya Janata Party and the National Front chided the caretaker government for its action and said the matter should have been left to the new government.

According to a published report the State Bank of India had airlifted the gold from Bombay to Zurich in two batches on May 22 and 24 by Swissair.

Major political parties described the sale of gold in the international market by India as a ‘desperate act’. The political parties also questioned the propriety of the caretaker government to take such a major policy decision. It could have been Left to the new government they said.

The criticism by the political parties followed newspaper reports on the sale of gold by the government the reports were confirmed by an official spokesman tonight.

The Congress-I assailed the action saying it was a desperate and absolutely irresponsible move to meet the foreign exchange situation. It also felt that the move would hardly help in bailing out the country from the balance of payments crisis as a mere peanuts would be earned.

The National Front said it was not commenting on the merit of the decision but the caretaker government had no right to take such a major policy step. The BJP criticized the action saying it had brought down the credit rating of the country

The left parties tonight declined to react immediately and said they would await the full details on the transaction

Official sources said the government had taken a decision last year to release 20 tonnes of gold to domestic jewelers for export of jewellery.

The spokesman said the transaction undertaken by the SBI only implies temporary monetization of gold lying idle with the government

As the gold would be returned at the end of the lease period by the SBI there would no deletion

of stocks on a permanent basis he said.

The spokesman also said the 60° had sufficient stock of gold to meet the needs of the exporters under the gold jewellery export replenishment scheme.

He said India had a perfect and unblemished record of meeting all international obligations.

Government’s strategy to manage the difficult balance of payments situation is aimed at maintaining this perfect record and protecting the foreign exchange reserves at a reasonable level the spokesman said.

He stated that the govt had taken several measures to compress institutions is also continuing the spokesman added. He also said that to conserve spokesman said.

Article extracted from this publication >> June 14, 1991