Mumbai: Finance minister P. Chidambaram on Friday urged Indians to contain their “uncontrolled passion for gold" to reduce the import bill, asking them instead to turn to financial instruments to hedge against inflation and boost savings that would help fund infrastructure creation.

“India needs $1 trillion, or ₹ 55 lakh crore, towards improving its infrastructure," Chidambaram said at a function to mark the platinum jubilee of public sector Dena Bank. “Half of it will come from government and half will come from private investors, but ultimately it will be the savings that will be used to finance it."

“Unfortunately, we have difficulty in shedding our old habit—that of putting our money in gold. We must be able to contain our passion for gold," the finance minister said.

Chidambaram noted that India imported $5 billion of gold in the last fiscal. Unless gold imports are curtailed it will be difficult for the government to bridge its current account deficit in case capital inflows slow down.

Chidambaram said the launch of inflation-indexed bonds will help savers to hedge against inflation and urged investors to buy them instead of gold.

He also pledged to stick to measures to contain inflation.

“We have taken a number of steps to contain inflation. One measure is to contain fiscal deficit. I have drawn a red line on fiscal deficit. And I will not breach the red line and whatever measure is needed will be taken to contain fiscal deficit."

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