Indians and Gold

This is in response to the article "Do we know something about gold the world doesn’t?" appeared in ET. The link is here



The author has not come out with any suggestion or new insights in the presentation. Indian economy cannot afford to import gold at the presnt inflated value of gold and unfavourable exchange rate. It is time the sentiments attached to gold gradually disappear and the holdings of gold in India get converted into productive assets. India is far behind in infrastructure and this needs to be developed to make it a vibrant and fast growing economy. The money lying in the form of gold needs to be converted into cash and put into use for infrastructure development.The Government should discourage investment in gold and import of gold to save both money and valuable foreign exchange. The craze seen of late,to speculate on gold price volatility needs to be nipped in the bud itself. The rush after gold is widening the inequallity between haves and havenots and it is not good in the long run for the society.The approach by the Govt should be1) To Set up a Gold Bank and see that all gold holdings which include institution's and family holdings are taken as deposits on payment of some interest 2)Convert the Gold into cash and put into productive use in the economy3)Discourage speculation in Gold 4) Ensure that gold imports are well regulated 5) Gold encourages black money hoardings in the economy and it is the responsibility of the Govt to see that Gold hoardings are tracked.6)Purchase and sale of Gold above a cut off limit to be tracked by insisting payments through cards, cheques and internet and indicating PAN numbers.7) Educate the public not to run after gold and bring discipline through dowry prevention regulations.
8) The income tax wealth tax and sales tax for gold needs to be reviewed and reformed.
It is time for investors to realise that gold does not enjoy an intrinsic value and internal rate of return. The Govt should carry out a survey to assess roughly the Gold holdings and take appropriate steps to put them into optimum use to develop the economy.

Dr.T.V.Gopalakrishnan