It is well-known that private gold holdings in
are colossal. Government stock is (according to September 2008 figures) 357.7 tonnes or 3.1% of the country’s forex reserves (http://en.wikipedia.org/wiki/Official_gold_reserves). This is comparatively very low. The value keeps changing depending on the fluctuations of the Indian Rupee-US Dollar parity. India
But privately held gold in
is estimated at 50,000 tonnes! (Business Line http://www.thehindubusinessline.com/2009/01/16/stories/2009011650260800.htm). The country could be gold bankers to the world! India
The Business Line report reminds us that S. Venkataramanan, the then Governor of the Reserve Bank of India (RBI) had mooted the idea of a Gold Bank way back in 1992 and the then Finance Minister Manmohan Singh had included the proposal in that year’s Central Budget. But a senior official of the RBI shot down the scheme. If implemented, it could have harnessed at least a part of this silent wealth for more meaningful use.
Annually, 700 tonnes of the yellow metal is sold in the country, according to P. Kishore in his column ‘Business Boom’ in today’s Malayala Manorama.
Who buys it?
Kishore says 17% of the gold is gobbled up by the tiny State of
Kerala which accounts for about 3% of ’s population. That works out to 119 tonnes of gold. A sovereign coin is 8 gms. The arithmetic is simple. The people of Kerala buy about 15 million sovereigns a year or about half a sovereign per head. India
A sovereign costs about Rs.11000 these days!
Good investment? I suppose so. But how many can afford?