The investments in Gold and Real estate particularly housing have gone up because of1)high level of inflation and negative rate of return by way of interest2)Prevalence of heavy amount of black money due to wrong and ineffective taxation policies and3)lack of investment avenues due to policy paralysis from the Goverment side.The savings rate deregulation has not brought any changes in the interest rates offered by most of the banks and there are no alternative investment avenues other than Gold for the people to take care of ever increasing inflation.Those who can afford to saveie middle Income groups and rich people have better avenues of spending and investments and the opportunities are plenty in the economy as there are no checks or ceiling on the acquisition of properties.The Income tax return does not have column to indicate the very basic information on the assets held by the assessees.There is no way of tracking of investments in Gold or properties and people merrily avoid banks
from: Dr.T.V.Gopalakrishnan
Posted on: Aug 24, 2012 at 08:02 IST in response to the write up on RBI worries on rising housing and Gold prices appeared in The Hindu Business Line dated 24/08/12.
