A reason for unreason | Business Standard

A reason for unreason | Business Standard

Online comments posted on October 19, 2013:

Once the week end hangover fades out, let us face the reality. Quoting Archeological Survey of India(ASI) sources, the report on the same day (Gold to be struck across 10 states, says ASI) mentions about 53 sites with potential gold reserves identified by ASI. Let someone in the media or any RTI enthusiast research about the Sadhus and their dreams on which these findings are based. Meanwhile let us talk about material things on the surface of earth. While digging deep can happen simultaneously, let us sweep the gold spread on surface and make an inventory and assess its value. Media can help by creating an awareness in the minds of people who formulate policy which manages the nation’s resources. A querry from Reserve Bank of India about the quantum of gold stock with some religious organisations in Kerala bounced back with a straight denial of information and, if hearsay is to be believed, almost an apology for having asked for the information in the first place! At higher levels renowned economists advising GOI are arguing that any attempt to control import of gold will ‘encourage smuggling of the yellow metal’. According to some estimates floating in the media India has a domestic gold stock of 20,000 tonnes. Sometime back FM had told media that country’s coal stock will last for 200 years. It is high time India had a scientific look at its resources both on surface and under the earth(underground may be misinterpreted to include assets on surface but not accounted!). If an inventory of such resources/assets is created, our fear of external agencies making off the cuff remarks about our growth and potential may vanish. If common man or any legal authority feels that there is a need to bring a portion of hidden resources into productive use, the idea cannot be faulted based on sentiments or expediency. In this context the moves on the way for better management of gold in India should be welcomed. The RBI initiative to study the issues relating to gold imports and domestic gold stock has to be seen in this perspective. If people or GOI feels that the study should be by a larger body, that should be examined. The country cannot allow sentiments and external influence to impact policies for managing nation’s resources or regulating their use. Domestic gold stock need to be reformed and part of it put to productive use. If there is a political will, GOI should seriously go ahead with the following initiatives(the list is illustrative) which have already seen some beginning during the last one year: • Make a realistic estimate of surface gold stock in India. Individuals and institutions holding gold stock above a threshold level should report the quantum of gold held to a designated authority. • Insist on standardisation of a reasonable portion of gold held by institutions. Infrastructure for such standardisation should precede. • Encourage financial institutions to increase their gold portfolio. Organisations including religious institutions should be provided incentives to deposit gold with banks. • Establish a National Registry to keep track of inflow, stock and outflow of gold in various forms. • Encourage introduction of gold-backed investment instruments. M G Warrier, Mumbai


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