Quick Edit | Faith of the people

The preoccupation of India's banking and finance officials with goldheld as a culprit for the deteriorating current account balanceis perplexing

The preoccupation of India’s banking and finance officials with gold—held as a culprit for the deteriorating current account balance—is perplexing.

photoReserve Bank of India deputy governor K.C. Chakrabarty has said, “Ninety per cent of the gold demand is jewellery or to offer to god. Both have to stop."

Has our officialdom ever wondered which asset in the country gives one of the highest inflation-adjusted returns? If they had understood the investment dilemmas of citizens, they would not be so harsh in their assessment.

The fact is that most Indians search for reasonable returns and the safety of their investment. For small investors, equities are a dangerous proposition, while most sarkari investment options are a losing bet.

It is true that gold imports make a tidy dent in the current account balance. But discouraging gold purchases is hardly an answer.

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