It is a fact universally known that Indians are very crazy about, or rather greedy for gold. Indian women are so fond of the yellow metal that they even keep pestering their husbands to buy more of it. This infatuation with gold resulted in India being the top most importers of the yellow metal in the world. In fact, gold is the second most highly imported commodity by India after crude oil.
However, this fondness for gold is causing a lot of damage to the Indian economy and also resulting in a large amount of financial resources, otherwise productive, go useless. As our domestic production of gold is very negligible, we are importing huge quantities of the precious metal from other countries by spending the valuable foreign exchange. Moreover, the gold imports are leading to a large current account deficit which is also known as trade deficit thus causing a lot of damage to the Indian economy.
Investment in Gold is counterproductive in many ways.
Gold prices are volatile and there is no guarantee of an appreciation in its price.
Owning gold poses safety and security problems as it has the potential to attract the attention of anti-social elements.
Buying Gold is an unproductive investment and, therefore, does not create any employment opportunities.
Gold jewelry is subject to wear and tear and thus gradually loses its value.
Owning gold imposes an unnecessary burden on people as they have to spend money to hire lockers for its safe keep.
The possession of gold jewelry in excess leads to the vulgar display of wealth by the elite, which leads to many undesirable effects on the society. People who don’t own any jewelry, coming under the influence of demonstration effect, buy it thus depriving themselves of more useful and productive goods and services.
Most of the gold jewelry that is sold in our country, especially in rural areas, is adulterated and, therefore, there is a fair chance of the buyers losing out on quality.
Gold is very handy for the fraudsters to hoard their unaccounted and ill-gotten money by converting it into bullion and store it without worrying about another episode of demonetization. So there is a direct correlation between the quantity of gold and the magnitude of the corruption.
So there are numerous disadvantages of owning gold and the advantages, if any, occur only to the elite class who want to stash their unaccounted wealth.
Fraudsters, who are inclined to make quick money and accumulate unaccounted wealth are entering into gold business. The jewelry sellers revealed their true colors and proved what they are capable of by selling huge quantities of gold to currency hoarders on the initial days of demonetization. Many of these jewelers were caught flouting the rules and huge caches of currency were seized from their possession.
There is a link between religion and gold. Hindus don’t leave any festive opportunity to buy gold. The Hindu clergy, who have a knack to mislead the community just to satisfy their narrow self-interest, fabricate fictitious stories, which are irrational to the core, just to promote the accumulation of gold among the followers of Hinduism. Festivals like ‘Akshaya Tritiya’ and ‘Dhanteras’ make people flock to the jewelry shops to procure the metal.
Worshipping wealth is a very good idea, but that wealth should create opportunities for the people and must contribute to the overall good of the society. Gold, the way people acquire it and use it in India, is only a manifestation of selfishness, greed and degeneration in ethics. Therefore, Hinduism, which requires reformation more than any other religion, should give a serious thought to this social evil and try to eradicate it.
This is the time for the government to bring about awareness among the people about the ill effects of accumulating gold and to formulate policies that thoroughly discourage the acquisition and consumption of the metal. Acquiring the precious metal by using unaccounted money should be treated as an offense and penalized accordingly. Regulation of the acquisition and consumption of the yellow metal is a much needed religious and socio-economic reform in our country which will invariably lead to the increased availability of financial resources to the productive purposes thus strengthening the economy.