Glittering ‘prestige’

In the 75 years of independence, the price of gold has skyrocketed. When India became independent, the price of 10 grams of gold was Rs 88.62 and in the year 1964, its price further reduced to Rs 63.25. In this way, the price of 10 grams of gold has increased from a few rupees in 75 years to reach the level of more than Rs 50,000. Today, the price of 10 grams of gold has become Rs 58,000. At the time of independence, the fare for the economy class from Delhi to Mumbai was Rs 140, which was almost double the price of 10 grams of gold at that time. Today, there has been a radical change in this situation and airfare has been reduced several times from the cost of 10 grams of gold.

The demand for Gold in India is mounting with each passing day as women here have been crazy about gold since time immemorial. In ancient times, along with women, men also used to wear golden ornaments. Evidence of this has been found in the remains of the Harappa and Mohenjo-Daro periods.

In May 2022, golden bangles, earrings, etc. worn by men were found in an excavation at Rakhigarhi of the Harappan period. Bangles, necklaces, rings, earrings etc. worn by women have also been found in the excavation. These excavations prove that Indians have been obsessed with gold ornaments for centuries. Gold is so ingrained in the lifestyle and culture of Indians that their life is incomplete without it. As per the oldest scriptures like Rigveda, the origin of the universe is believed to be from a seed in the form of a golden egg called Hiranyagarbha.

For Indian women, gold is not just a jewel, but a symbol of self-respect and pride. Gold transactions are made in 16 samskaras of Hinduism from birth to death. At the time of the birth of a child, he/she is made to wear a gold pendant with a black thread around his/her waist. Even at the time of Yagyopaveet Sanskar, gold ornaments are worn by the children. On entering the house of in-laws for the first time, the mother-in-law gives gold ornaments to her daughter-in-law as a gift. Not only this, even in the occurrence of death, gold is donated to a Brahmin.

This is not the case in Western countries. People there do not wear a lot of jewellery during marriages. Nor is there a trend of giving gold jewellery or gold as a gift.

In the USA and Europe, only a gold ring is given at the time of marriage, which is of 9 or 12 carats, while in India, 22 or 24-carat gold is given as jewellery to the bride and bridegroom. Nowadays gold biscuits are also given as gifts on auspicious occasions.

According to a report released by the World Gold Council (WGC) in May 2020, Indian women had about 24,000 tonnes of gold, which can be considered the world's largest gold treasure. WGC also affirmed that Indian women wear 11 per cent of the world's total gold reserves as jewellery, which is more than the total gold reserves of the top five countries in the world combined. Today America has 8,000 tonnes, Germany has 3,300 tonnes, Italy has 2,450 tonnes, France has 2,400 tonnes and Russia has 1,900 tonnes of gold. The states in southern India account for 40 per cent of the total jewellery purchases in the country, of which Tamil Nadu alone accounts for 28 per cent.

In India, heroines of films, daughters and daughters-in-law of big businessmen or corporate families, and heirs of kings/queens prefer to wear expensive gold jewellery on special occasions and marriages. For this reason, today, billions of rupees are being spent on buying gold ornaments. During the marriage season or festivals like Diwali and Akshaya Tritiya, gold ornaments are heavily purchased, because the practice of giving gold ornaments as gifts has increased a lot.

There is a large amount of gold deposited in the temples of India as well. In this regard, WGC issued a report in 2020, according to which more than 4,000 tonnes of gold is deposited in the temples of India. For example, the Padmanabhaswamy Temple in Kerala has 1,300 tonnes of gold deposits, while the Tirupati temple in Andhra Pradesh has about 300 tonnes.

Since India is unable to supply the domestic demand for gold by itself, it has to depend on other countries to meet its domestic requirement. India imports 45.8 per cent of gold from Switzerland, 12.7 per cent from the United Arab Emirates (UAE), 7.3 per cent from South Africa and Guinea and five per cent from Peru. At present, India comes in second place in the world after China in terms of buying gold, but the way the demand for gold in India is increasing, it seems it will soon overtake China.

Due to the increase in the import of gold, India's trade deficit is increasing, as well as the rupee is weakening against the US dollar.

At present, due to the ongoing war between Russia and Ukraine and skyrocketing inflation, the rupee is continuously weakening. The increasing import of gold also has a big role in weakening the rupee. For this reason, in July 2022, to prevent the slump in the value of the rupee and to reduce the import of gold, the import duty on gold was increased from 7.5 per cent to 12.5 per cent. This was also necessary because in FY 2021-22, there was an increase of 33 per cent in the import of gold in the country, and the total value of gold import was about Rs 37,44 billion.

It is clear that in the coming days, the demand for gold will further increase in India, resulting in an increase in prices. In the current situation, the increase in import duty is also not able to stop the import of gold, because common people are crazy about gold in India. Indians do not consider this as an investment. It is like the blood flowing in the arteries of Indian women, which can never be taken out of the veins.

Views expressed are personal