Why is Indians’ addiction to gold the biggest obstacle to realizing PM Modi’s dream?

Whenever it comes to investing in India, the first choice of most people is to invest in gold. From childhood, we have heard elders advise us that investing in gold will keep our money safe. Apart from this, you can also take a loan if required. However, a member of the Prime Minister’s Economic Advisory Council believes that Indians’ interest in gold is becoming the biggest obstacle to realizing PM Modi’s dream.

Last Monday, November 20, Nilesh Shah, a temporary member of the Prime Minister’s Economic Advisory Council (PM-EAC), said in a statement that, ‘If the people of India were not in the habit of importing gold, India would have imported gold. . A $5,000 billion ($5 trillion) loss would have achieved the gross domestic product (GDP) target ‘much earlier’. Shah, a veteran of the mutual fund industry, said that in the last 21 years, Indians have spent around $500 billion on gold imports alone.

Shah adds, “We are working towards Prime Minister Narendra Modi’s target of $5,000 billion GDP, but we are far from just a habit, and we will reach $5,000 billion much earlier.” would have become the economy of We have probably lost a third of India’s GDP by not making the right financial investments.

375 billion dollars have been spent in the last 21 years.

In the same statement, Shah cited official figures and said that the Indian public had spent $375 billion on gold imports on a net basis in the last 21 years. He believes that if instead of investing in gold, he would have invested his money in entrepreneurs like Tata, Ambani, Birla, Wadia and Adani, what would have been the GDP of our country? What would have been the growth, what would have been our GDP per capita?

There is an English saying that old is gold. But in the context of India, this adage becomes old as gold. Gold has been worshiped as a metal in our country since ancient times and today there is three times more gold in the homes of our country than the treasury of the United States. The US has 8,133 tonnes of gold in its treasury while India has 25,000 tonnes of gold in its treasury and the value of this gold is equivalent to 40% of India’s total GDP.

4000 tons of gold in temples

Another interesting information is that the temples of India also have huge reserves of gold. According to an estimate, more than 4000 tons of gold are deposited in the temples of our country. Germany, Italy, France, Russia, China and Japan also do not have that much gold reserves.

Why do people in India like to invest in gold?

Economics professor Manish Srivastava speaking to ABP said that two reasons can be considered for doing this, first is that we have an ancient Indian tradition that the more gold you have, the richer you are. Considered. Also, women love to wear gold jewelry from the beginning.

According to Manish, the second most important thing is that you can use sauna in case of any untoward incident in future. Military is the only investment you can cash out overnight.

30% of gold is used as investment.

‘Sleep will never leave you even if your relatives leave you’, was once a popular saying in our country and this belief in gold is still present in people’s minds.

This is the reason why around 50% of gold is still used in jewelery in India. About 30 percent of gold is used as investment, 15 percent of gold is deposited in central banks and 7.5 percent of gold is also used in electronic gadgets and microchips.

In the month of October, there was a percentage increase in gold purchases.

In October this year, India’s gold purchases increased by 60% to 123 tonnes on a year-on-year basis. which is at a 31-month high. A total of 77 tonnes of gold was imported during the same period a year ago.

According to government sources, an average of 66 tonnes of gold was imported in October last decade. But this time, due to fall in gold prices ahead of the festival, there has been an increase in gold purchases and a big increase in its imports.

Is investment in gold really slowing down the country’s growth?

In the last 21 years, the Indian people have spent around $500 billion on gold imports alone. But if the same $500 billion is invested in India’s GDP instead of importing gold, not only the number of industries in the country will increase, but people will get employment, production and consumption will increase, which will increase the total GDP of the country. will grow Country.

Government schemes to increase investment

Answering this question in a BBC report, Observatory Group Senior India Analyst Ananth Narayan said that India needs to get its reform story right.

He said, “India needs to increase investment, for this India has also launched many schemes. In sectors like roads, railways, ports and power, the government has invested more money than before. Unfortunately, “our track record of reform in these areas makes it look like the current situation will improve and we will reach our growth potential.”

What is the current GDP of India?

The National Statistical Office (NSO) recently released India’s Gross Domestic Product (GDP) data. These are the fourth quarter figures and have been much better than expected. According to NSO, our country’s GDP growth rate in 2022-23 is 7.2%. However, in the year 2021-22, the estimate was 9.1 percent.

Talking about the previous quarter, India registered a GDP growth rate of 6.1 percent as compared to 4.4 percent in the same period. GDP growth in the fourth quarter beat expectations. The RBI had estimated a growth of 5.1 percent during the first quarter. While the GDP growth rate for the entire financial year 2022-23 has been 7.2 percent. This GDP growth is higher than RBI’s estimate of 7%.

These countries have the highest gold reserves.

As of the third quarter of 2022, the United States currently holds the largest gold reserves with 8,133 tons of gold, according to a World Gold Council report. After the US, Germany has more than 3363 tons of gold reserves. Italy, the third European country in this race, has about 2451 tonnes of gold reserves. France has about 2436 tons of gold reserves. India is ranked 9th in this list.


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