With an aim to aid to the government’s initiative to reduce current account deficit (CAD), the Gem and Jewellery Trade Federation (GJF) plans to propose to the finance ministry to allow Indians to accept unlimited taxfree foreign exchange gift in the form of gold for minimum six months.

The industry would not import the ‘much more than expected’ gold on acknowledging it as a free gift and this might help the government not to take measures to curb demand.

Also, GJF has requested the finance ministry to take out atleast 10 per cent of the 25,000 tonne gold held by Indian households and utilise it by lending it to jewellers as working capital.

“Even if the government allows the foreign exchange gift for six months, 2-3 years gold import will not be a concern. It should be treated like foreign exchange gift,” said Bachhraj Bamalwa, ex-chairman, GJF.

On the 25,000 bullion holding, Bamalwa said if the government can bring out even a part of it by way of an amnesty scheme, India will not have to import gold for atleast three years.

Finance minister P Chidambaram hinted more cubs possible after seeing the May import data which was around 162 tonne. With May imports soaring, the government is under pressure to look at more measures to rein them in.