Indians, world’s second biggest consumers of gold after China, have around 20,000 tonnes of gold lying idle in Hindu temple vaults, bank safes and jewellery boxes — a trove worth about $700 billion at current prices depending on purity levels.
Now the government is encouraging people to lend their gold to banks through the Gold Monetisation Scheme starting in November, hoping to bring the national stash into the economy.
Under the scheme, households or temple trusts deposit their gold with banks and earn tax-free interest and banks then lend it to jewellers and a valuable asset is brought into circulation.
“A lot of people, particularly women and those in remote rural areas, hold jewellery which is lying idle in India, which is not taken as an investment,” Gopal Krishna Agarwal, economic affairs spokesman for the ruling Bharatiya Janata Party, told AFP.
“(This scheme) can earn some return for those persons.”
But the idea is being resisted by Indian women. According to AFP, Poonam Vohra, a housewife from the capital’s middle-class suburb of Rajouri Garden, say they are unsure about handing over their treasures.
“Gold is a really expensive buy and as it is we don’t have much, so whatever we have we’d rather keep,” said the 52-year-old, who keeps most of her jewellery in a bank vault after being robbed of a gold chain while walking in Delhi.
Another Indian woman, Geetanjali Agarwal says she won’t hand over her gold to the government, as it wages a campaign to make the nation’s hoard of the precious metal more productive.
“For a woman to part with her jewellery, that is very difficult,” said the 38-year-old New Delhi housewife, who also buys gold coins at the Indian festival of Diwali as an investment.
“My daughter is 10 years old and I’m already collecting pieces for her.”
A similar scheme in 1999 was a near-total failure, because of low interest rates.
The government promises the new scheme is different, with the minimum deposit lowered from 500 grams to just 30 grams — roughly the same as three gold bangles.
Banks will be allowed to set their own interest rates, expected to be between two and four percent, and post offices will boost the scheme’s reach in rural areas.
For jewellers in Delhi’s Karol Bagh, where the streets are lined with shops selling diamonds and antiques, monetising India’s gold stash would be good news, reducing the need for expensive imports.
“It will be good if our gold gets rotated, if the gold that is lying in bulk with people is put to use,” said Anoop Dhar, manager of the opulent Sunar jewellery store.
“Nothing can be better. We wouldn’t have to bring in gold from outside.”
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Given that the State proposes to melt down beautiful artwork, thereby destroying value, women will do well to hang on to their property. Trust the State at your peril!