Unwarranted optimism is the norm in our Union government. But surely the government’s advisers are expected not to generate gravity defying numbers. On Friday, the Prime Minister’s economic advisory council (PMEAC) just did that. It pegged economic growth for 2012-13 at 6.7%.

That’s not all: the PMEAC wants curbs to be placed on imports of gold and also wants the government to raise diesel prices. Both ideas are removed from practical realities.

While gold imports are worsening the country’s current account balance, there is sound economic logic as to why individuals have rebalanced their portfolio in favour of the metal from, say, equities, bonds and other investment options.

Unless there are serious reforms in the financial markets—which seem unlikely in the years ahead—curbing gold imports will be nothing more than a Soviet solution. The PMEAC needs a dose of realism.

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