You just can’t beat gold! | Business Line

You just can’t beat gold! | Business Line



My VIEW:



The
Hindu Business Line, January 10, 2015


Letters


A golden opportunity *


This refers to the article, ‘You just can’t beat gold!’ by SS Tarapore
(January 9). India has traditionally been in love with gold.


The writer pleads for increasing the gold component in RBI’s forex four
times, referring to the recommendation of the KUB Rao Committee report to build
a buffer stock through monetisation of the large domestic private hoard of
gold. By making this plea, the writer is not asking for the moon, considering
the fact that in November 1994, the share of gold in India’s total reserves was
18.4 per cent; this came down to 7 per cent in September 2014. Though official
estimates are not available, India’s surface gold stock has always been guessed
at 24,000 tonnes or more. If this stock is accounted for and 5 to 10 per cent
is put to use, India will be able to take a two-year holiday from importing
gold.


M G Warrier


Thiruvananthapuram


Submitted version of
the letter copied below:


January
9, 2015


The
Editor


The
Hindu Business Line


 


Letters


Respect
gold


This refers to the
article “ You just can’t beat gold!”(Maverick View, January 9). India has
traditionally been adoring gold for its glittering and sometimes for the yellow
metal’s intrinsic value. But, when it comes to the  management of gold in modern times from the
economic perspective the country’s performance has been not so commendable.


A second reading
of the article will lead us to the underlying reasons for the concluding
observations made by the author  who
pleads for increasing gold component in RBI’s forex by four times, pointing out
the recommendation of KUB Rao Group report to build a buffer stock through
monetisation of the large domestic private hoard of gold.


By making this
plea, author is not asking for the moon, considering the fact that in November
1994, share of gold in India’s total reserves was 18.4 per cent which has come
down to 7 per cent in September 2014. Though official estimates are not
available, India’s surface gold stock has always been guessed at 24,000 tonnes
or more. If this stock is accounted and 5 to 10 per cent is put to use, India
will be able to take a two year holiday from importing gold.


While gold
standard may be far off, we should not delay respecting domestic gold stock as
a possible catalyst in the development process of the country.


M G Warrier,
Thiruvananthapuram


 

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