Bharat is one of the largest gold importers in the world, and the imports mainly take care of the demand from the jewellery sector. The country's gold imports, which have a bearing on the current account deficit (CAD), increased by 15.4 per cent in the last few months. Import duty on gold has been increased to 12.5% from 10%, a move which would make the yellow metal and jewellery expensive in the domestic market. The decision came at a time when the domestic jewellery industry was demanding a cut in the import duty. The commerce ministry, too, had in past recommended for reduction in the duty. Empirically it has been estimated that the income elasticity of gold import demand is 1.02 in the short-term and 1.24 in the long-term while short and long-rum price elasticity of gold import demand are -2.33 and -0.41 respectively. Q1. Based on elasticity figures, what the government should do to curb gold import in the short and long-run? Give reasons