India's gold holdings
Though India is among the fastest developing nations in the world, yet the per capita income is below $1000. It is due to the fact that India is the second most populous states in the world only next after china. With the liberalization of the economic policy India became an attractive destination for foreign investments and has huge foreign exchange reserves.
India surprised the world by buying out 200 metric tons of Gold from IMF at $6.7 billion on 3/11/09 at an average price of $1045 per ounce. Experts say that India is increasing its gold reserves to hedge against the falling US dollar.
According to reports Indian fascination for Gold made it the largest consumer of Gold since ages. Out of the estimated 160,000 tons of gold mined so far till now, Indians privately own as much as 15000 tons of gold. At current rates the value of private gold holdings in India are estimated at more than $50 trillion dollars.
While the government introduced many schemes in the past to unlock the privately held gold value, none really worked as people hold the view that keeping gold at home brings them a sense of security and safety.
Instead of spending billions for gold purchases from abroad, the government may announce such schemes that attract private gold holders to part with their gold so that the money flows into the economy speeding up all round growth.
100 billion dollars will be sufficient to ensure safe drinking water to all the citizens and another 50 billion dollars go a long way in improving sanitation facilities and health facilities. Another 50 billion dollars may be needed to provide reasonable shelter to all.
India has to do something to unearth the wealth within so that people enjoy a standard of living that is reasonable. India has to find solutions for development from within. Only thing is that they don’t know how to unlock the wealth within their society.