NEW DELHI: The finance minister Dr Manmohan Singh Thursday strongly defended the pledging of 46.91 tonnes of gold abroad saying the decision was “economically sound politically right and psychologically correct”.
The gold transferred was a little short of the 15% of the gold abroad saying the decision was “economically sound politically right and psychologically correct”.
The gold transferred was a little short of the 15% of the gold reserve of 332 tonnes with the Reserve Bank of India. As per RBI rules the bank can send abroad up to 15 of its gold reserve.
The decision was a short term arrangement to tide over the problem of default Dr Singh said but could not give a guarantee that the country would be able to get back the pledged gold soon.
Replying to clarifications sought by members in upper house (Rajya Sabha) of Parliament Singh said the gold had been pledged with the Bank of England and Bank of Japan to get 400 million U.S. dollars.
He also said the decision had been taken by the govt and the RBI should not be blamed for it.
He strongly defended the move saying there was no other alternative and many countries in the world including United States Japan and France had been resorting to the practice of selling their gold.
Article extracted from this publication >> July 26, 1991
