Gold Management can boost economic growth

Gold management can boost economic growth Domestic gold stock, if exploited judiciously, has potential to put back Indian Economy on growth track. Government needs to think how it can convert the average Indian's craze for the yellow metal into an opportunity to reduce import of gold by mainstreaming domestic gold stock with individuals and institutions. Kautilya's Arthashastra highlights the importance of incentivising/beguiling citizens and institutions to part with their wealth for the larger purposes of strengthening the state. Going by the spirit of this advice, government should scout for possible avenues of investment of gold which will attract citizens and institutions to invest at least a part of their gold idling in vaults in gold-backed instruments including exchange traded funds. The attractions for the investor will include savings on providing security/insurance for gold stock, return on investment and the satisfaction of participation in the nation's economic development efforts. According to various estimates India has a domestic gold stock of 20,000 to 24,000 tons awaiting accounting and mainstreaming. If 10 percent of this gets invested in productive avenues in next 5 years, the annual gold imports bill will come down considerably. However, this will need backward and forward linkages like : 1) Making a realistic assessment of idle gold stock. 2) Providing incentives to owners of gold stock to declare the stock without a threat of punishment/confiscation. 3) Infrastructure, technology support and linkages for gold refining and certification facilitiesof internationally acceptable standards. M G Warrier Thiruvananthapuram


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