NEW DELHI(BullionStreet): Asia's third largest economy India is trying everything now to stop excessive gold imports, accounted for the high current account deficit of the country.

More and more gold based schemes were being planned by government to encourage investors to join schemes without investing in the physical commodity.

According to India's Mid-Year Economic Analysis tabled in Parliament Monday, gold-backed products will help the investor enjoy benefits of investment in the metal without investing in the physical commodity.

India is considering schemes like gold deposits, accumulation plans, gold-linked accounts and pension products to curb demand for the precious metal.

The report said "Now gold backed financial instruments in the form of modified gold deposits and gold accumulation plans, besides gold-linked accounts and pension products linked with the precious metal are some measures being considered to reduce the attraction of a direct investment in bullion and jewellery in the domestic market and check a substantial rise in imports,"

However, gold-linked investments would have to be monitored to see whether the overall demand for the metal actually falls, it added.

The Finance Ministry's Chief Economic Advisor Raghuram Rajan told reporters: "We are worried about gold imports. It is an unproductive instrument. The way to curb holding of gold is to create more attractive financial instruments. "Some gold linked instruments have been talked about by the RBI but potentially there could be other financial instruments to attract investment."

Thecurrent account deficit(CAD), which occurs when a country's total imports are greater than total exports, has been rising on the back of record trade deficits, which in October jumped to a 12-year high of $ 21 billion on the back of rising oil and gold imports.

The Reserve Bank has unveiled a slew of curbs on gold purchase and financing as imports touched a record high last year, pushing up the current account deficit to a historic high of 4.2 per cent in the year.

In the 2011-12 fiscal, India's gold imports stood at $ 60 billion and the quantum of import was 1,067 tonnes. A Finance Ministry official said the imports have shown signs of moderation and that gives the government hope that the CAD will be lower this fiscal.

The current account deficit (CAD), which occurs when a country's total imports are greater than total exports, has been rising on the back of record trade deficits, which in October jumped to a 12-year high of USD 21 billion on the back of rising oil and gold imports.

In the April-June quarter of the current fiscal, however, gold imports had contracted by 18.4 per cent year-on-year to Rs 71,912 crore ($ 13 billion). Gold imports into the country has risen considerably in the last three-four years.