Why is Indians’ fascination with gold the biggest hurdle in fulfilling PM Modi’s dream?

Why is Indians’ fascination with gold the biggest hurdle in fulfilling PM Modi’s dream?

Whenever it comes to investment in India, the first choice of most people is to invest in gold. Since childhood, we have heard the elders in the house advising that your money will be safe by investing in gold. Apart from this, you can also take a loan if needed. However, a member of the Prime Minister’s Economic Advisory Council believes that Indians’ fascination with gold is becoming the biggest obstacle in fulfilling PM Modi’s dream. 

On Monday, November 20, Nilesh Shah, a temporary member of the Prime Minister’s Economic Advisory Council (PM-EAC), said in a statement that, ‘If the people of India did not have the habit of importing gold, then India would have lost 5,000 billion dollars (5 trillion Dollar) Gross Domestic Product (GDP) target would have been achieved ‘much earlier’. Shah, a veteran of the mutual fund industry, said that in the last 21 years, Indians have spent about $ 500 billion on gold imports alone.’

Shah further says, ‘We are the Prime Minister of a Gross Domestic Product (GDP) of 5,000 billion dollars

375 billion dollars have been spent in the last 21 years

There is an English proverb that old is gold. But in the context of India this saying becomes gold is old. In our country, gold has been worshiped as a metal since ancient times, and today three times more gold is kept in the homes of our country than the government treasury of America. America has 8,133 tonnes of gold deposited in its government treasury, while India has 25,000 tonnes of gold deposited in its homes and the value of this gold is equal to 40 percent of India’s total GDP.

4000 tons of gold in temples 

Another interesting information is that the temples of India also have huge reserves of gold. According to an estimate, more than 4,000 tonnes of gold is deposited in the temples of our country. Germany, Italy, France, Russia, China and Japan also do not have this much gold reserves. 

Why do people in India like to invest in gold 

Economist professor Manish Srivastava said while talking to ABP that two reasons for doing this can be considered, firstly, it has been in our ancient Indian tradition that the more gold you have, the wealthier you are considered. Apart from this, women like to wear gold jewelery from the beginning. 

According to Manish, the second most important thing is that you can use gold in case of any untoward incident in future. Army is the only investment that you can cash in overnight. 

30 percent of gold is used as investment 

‘Even if your relatives leave you, gold will never leave you’, once upon a time a saying was widely spoken in our country and this faith in gold is still in the minds of people. 

This is the reason why even now in India, about 50 percent of gold is used in making jewellery. About 30 percent of gold is used as investment, 15 percent of gold is deposited in central banks and 7.5 percent of gold is also used in electronic gadgets and microchips.

Percentage of gold purchases increased in the month of October 

Gold purchase in India has increased by 60 percent to 123 tonnes on annual basis in October this year. Which is at the highest level in 31 months. A total of 77 tonnes of gold was imported in the same period a year ago. 

According to a government source, in the last decade, on an average about 66 tonnes of gold was imported in October. But this time due to fall in gold prices before the festival, purchasing of gold has increased and there has been a big jump in its imports.  

Is investment in gold really slowing down the country’s development

In the last 21 years, Indian people have spent about 500 billion dollars on the import of gold alone. But if the same 500 billion dollars were invested in India’s GDP instead of gold import, not only would the number of industries in the country increase, but people would get jobs, production and consumption would increase, which would increase the total GDP of the country.

Government schemes to increase investment 

Observatory Group’s senior Indian analyst Ananth Narayan, while answering this question in a BBC report, said that India needs to fix its reform story.

He said, "India needs to increase investment, for this India has also started many schemes. The government has invested more money than before in sectors like roads, railways, ports and electricity. Unfortunately, our track record of reforms in these areas is pathetic. So right now it seems unlikely that the current situation will actually improve and we will be able to reach our potential growth."

What is the current GDP of India 

National Statistical Office (NSO) recently released India’s Gross Domestic Product (GDP) data. These are the figures for the fourth quarter and have been much better than expected. According to NSO, the GDP growth rate of our country has been 7.2 percent in 2022-23. However, in the year 2021-22 this estimate was 9.1 percent.  

If we talk about the last quarter, India has registered a GDP growth of 6.1 percent compared to 4.4 percent at that time. GDP growth rate in the fourth quarter has left expectations behind. RBI had estimated a growth of 5.1 percent during the first quarter. Whereas for the entire financial year 2022-23, the growth of GDP has been 7.2 percent. This growth of GDP is more than RBI’s estimate of 7 percent.

These countries have the highest gold reserves

According to the World Gold Council report till the third quarter of 2022, America is currently the country with the largest gold reserve with 8133 tonnes of gold. After America, Germany has more than 3363 tonnes of gold reserve. Italy, the European country at third place in this race, has about 2451 tonnes of gold reserve. France has a gold reserve of about 2436 tonnes. India is at number 9 in this list.  

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