Volume : V, Issue : VIII, August - 2015

A Study on Gold policy initiatives and Effectiveness in India

Mr. Krishna Gadasandula

Abstract :

<p><p>  India has an ambivalent relationship with gold. For consumers, gold is a prized asset, cherished as both an adornment and an investment. For the government, gold is a major contributor to the current account deficit, a challenge that needs to be addressed.Gold has always been an integral part of the socio–economic ethos of the Indianhousehold. As a commodity, it has always carried with it the tendency of invokinga sense of cultural and sentimental attachment, making its consumption andinvestment in India very different from that of other countries.In India, gold has, through generations,remained an obvious and natural choice of saving of all households.Gold has never been an easy product around which policy could be formulated. Policies around gold (andto some extent business plans and financial innovations related to gold) have all largely been based on acouple of assumptions; (a) Demand for gold in India will never wane; (b) People in India will not part withtheir gold easily; (c) Women are sentimentally attached to their jewellery and hence will not part with it; (d)If given a choice between cash or gold, Indian people will opt for gold. At various points of Indian history,one or all of these assumptions have been true.The purpose of this report is to re–examine gold policies and their effectiveness and build a case for formulating a comprehensive public policy on gold. And this study concluded that, drive the standardization of gold so that buyers and sellers can have faith in both the quality and price of their products. Introduce guidelines for compulsory quality certification of all forms of gold to encourage accountability and foster an environment of trust. Establish a Gold Exchange to ensure pricing standardization, increase transparency and improve supply and demand analysis. Establish a Gold Board to manage imports, encourage exports and drive development of necessary infrastructure. Allow Indian banks to use gold as part of their liquidity reserves. This would incentivise them to introduce gold–based savings products.</p></p>

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Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

Mr.Krishna Gadasandula A Study on Gold policy initiatives and effectivenessin India Indian Journal of Applied Research, Vol.5, Issue : 8 August 2015

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