Letters: Believe in gold | Business Standard Letters

Letters: Believe in gold | Business Standard Letters

Submitted version:

June 4, 2015
Believe in Gold
refers to the report “Will the gold for cash scheme pay off?” (June 4). The
straight and honest answer is ‘YES’. Once upon a time a Review Committee at the
national level concluded that ‘Cooperation has failed, cooperation must succeed!’ I have no reason to think that the move to
unearth at least a part of the estimated domestic stock of over 20,000 tonnes
of gold announced by the government is just another game the government is
playing. The move has in its background the need to reduce gold import, the
intention to account money being invested in gold and gold jewellery and the
noble objective of making a dead asset live and productive.
Celebrity economists/analysts have recently argued that ‘after
all, even if you succeed in making people deposit gold in banks, banks will
have to ‘import’ gold when gold deposits mature’. This argument does not hold
good, as such an eventuality may not arise, once a floating stock of a decent
quantity of gold is built up, and once the scheme becomes a live reality,
continuous inflow of deposits will take care of the quantity of solid gold for
meeting maturity liabilities(many may withdraw cash equivalent of gold, as they
may need cash for other investment options or for meeting other needs.
Another aspect is lax law enforcement in regard to collection of
tax or other levies. This is applicable to other commodities and even real
estate and need to be taken care of by the government.

, Mumbai


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