(This story originally appeared in on Nov 27, 2014)

NEW DELHI: After a series of measures to reduce gold import and check widening trade and current account deficits, the UPA government decided to lift several restrictions on May 16, the day results of the general elections were declared.Sources said just two days before the results were to be declared, on May 14, the finance ministry initiated a proposal to remove some of the curbs, resulting in a surge of import in recent months and putting fresh pressure on the trade deficit and the rupee , which hit 62 against the dollar last week.Apart from opening the floodgates to import, the move has also resulted in nearly half the imports now being routed through six agencies, raising alarm bells in the government. It has also raised questions about RBI 's decision to issue a notification based on outgoing UPA government's move to liberalize the import norms.Following a steep weakening of the rupee, which touched 68 against the dollar last August, the government clamped down on foreign exchange outgo and put severe restrictions on gold imports, which refused to come down despite a sharp increase in import duty.While imports declined from over $3 billion in April 2013 to $700 million in September 2013, a month after the curbs were put in place, shipments of yellow metal into the country was estimated at $3.7 billion in September 2014, after more liberal rules came into effect.The recent surge has resulted in the government reviewing the import norms, including the May 21 circular issued by RBI. Sources have questioned the timing of the circular from RBI but it has emerged that the central bank was pushed into issuing it due to pressure from the government.In fact, even before May 16, when the outgoing UPA finally moved the proposal on paper, finance ministry officials are learnt to have argued in favour of reducing the restrictions.Through the May 21 circular, RBI allowed star trading and premier trading houses to import gold, easing the restriction imposed on imports in August 2013 when only nominated agencies such as STC Project Exports Corporation and some banks were allowed to get yellow metal into the country. The imports came with the stipulation that 20% of the shipment went to exporters, while 80% was for domestic users.