Indian Prime Minister Narendra Modi is trying to make better use of the country’s massive 20,000 tons of unused gold. Modi’s new deposit program is trying to benefit the economy by cutting gold imports, but it is not as simple as some may make it out to be.
Buying and hoarding gold seems to be a tradition for the people of India, and India imports tons of gold every year. The hoarding of gold in India is putting a huge dent in the country’s current account deficit. It is the reason Prime Minister Modi decided to launch a scheme to monetize the gold lying with Indian households, and bring it into the economy.
The Gold Monetization scheme asks investors to deposit a minimum of 30 grams of gold into banks. The gold can be later withdrawn with interest in either gold or cash.
The Indian government launched the scheme right before India’s biggest festival Diwali to take advantage of the gold buying spree, but consumers are not as enthusiastic as expected.
CCTV’s Shweta Bajaj reports from New Delhi.
India's gold hoarding is hurting its economyIndian Prime Minister Narendra Modi is trying to make better use of the country’s massive 20,000 tons of unused gold. His new deposit program is supposed to benefit the economy by cutting gold imports. But it’s not as simple as earning money on gold.
Ankur Patel on India’s gold burden
CCTV America’s Michelle Makori spoke to Ankur Patel. He is the co-founder and chief investment officer of R-squared Macro.