India has raised import duty on gold yet again. This will drive gold smuggling, whose nearly 16% return on investment therefrom will make hedge funds envious. Apart from loss of revenue, smuggling also means greater cash flows for the underworld, and potential terror finance.

The government’s short-term approach to tax planning brings in immediate revenues but has the long-term downfall of driving away business, and encouraging tax evasion. No country has taxed its way to prosperity and India is no exception.