India should leverage the gold with the households

Abstract

India is one of the largest buyers of gold in the world. More than 90 per cent of this is for jewellery purposes and not for Industrial purposes. Table 1 gives the purchase of gold for jewellery by different countries in the last few years. In the past, Indian demand was nearly 30 per cent of global consumption. Recently, the attraction of smuggling has come down due to liberalized import policy. Incidentally, domestic production of gold is very negligible, running into a few tonnes. The purchases made in Middle East is also mostly by people of Indian origin and to that extent the demand by “Indians” is much larger. What is bought in Gulf states this year by the NRIs (non-resident Indians) will reach here may be in a year or so. At an average price of, say, Rs20, 000 for ten grams, we can estimate that for 1000 tonnes nearly Rs.2 Lakh crore has been spent in buying gold last year by Indian households, which is much larger than the aggregate capital raised from the stock market. Read more at: https://swarajyamag.com/commentary/india-should-leverage-the-gold-with-the-households-2