Monday, October 22, 2012

Gold and Land : the Two Great Detrimental Forces of Indian Economy !

Traditionally Indian women are irrationally attracted to the yellow metal. Gold is such a compulsive passion and addiction for most of them.

No logic or common sense go into their head when it comes to possessing gold. They are too happy if their near and dear ones spend all their incomes to buy gold ornaments or anything that is made of this shining metal which is other wise of little value to man kind.

They may tell hundred and one arguments in favour of their love for gold.

Any way the World Gold Council (WGC) members should be the happiest lot in this scenario and they are bound to do all they can to keep the Indian women stick to their traditional gold fancy for generations ! This group who controls the 20 odd gold mines of the world need to sell out their produce at the highest profits. A product that otherwise does not have any intrinsic value with regard to its usefulness !

So they keep doing all that is in their arsenal to keep the prices of gold keep rising over the years, though marginally with quantum jumps once every decade !

Total production of gold in the world is to the order of about 2500 metric tonnes per annum.[Source]

Out of the total world production, India imports nearly half. That means all the gold that gets mined and processed gets distributed to the millions of Indian house holds through the hundreds of jewellery shops of India, the only progressing business in India in the recent times.

India spends the major part of its foreign exchange, the hard earned money of Indian exporters and the Indian dollar workers, to import arms, petroleum and gold. Out of which the first and second get fired up and the gold becomes invisible, once it goes into the custody of the Indian women.

Indian women might tell that gold is their safest guarantee to safeguard against future financial difficulties. But in reality even when they actually try to use their gold for ensuring a financial problem, their gold would make them face more problems rather than save them from it. That is because their reluctance to sell it even when there is a crisis. They prefer to take loans pledging their gold at very high interest rates creating a situation for a bigger loss for them or their family.

Imagine the gold that has cumulatively sunk into the Indian house holds all these years !

In this context listen to what this economist warns : The collective obsession of 1.2 billion people with gold can play havoc in the economy unless govt draws up a plan !

Yes, indeed this maddening obsession is one of the reasons India remains as a poor nation. It is difficult to understand this for most people. How can you consider some one possessing half the gold of the world poor ?

But remember ! Gold is not going to get you food, water, education, health or jobs !

Gold ornaments are not going to make any women look attractive also. Those wearing those just as the brides of south India, in reality look ugly ! ( Excuse me for using that word so blatantly !)

Anything in excess is going to  burst after some time. Those who madly spend their money to buy and hoard gold should remember that.

Another facet of Indian economy is the illogical pricing of land. This tendency gained momentum in the recent past.

Land is not yet a scarce natural resource in India. Vast tracks of land are lying vacant without any useful economic activities.

Some people are using land as a unit of hoardable wealth just like gold. This tendency has made all other necessities of life such as housing, education, hospital care, roads and other infrastructure becoming unaffordable and with negative returns on investment.

When India became an independent republic, the visionary leaders had maintained some controls on gold and land. Gold controls and land ceiling acts and regulations were part of that visionary thinking.

As of now, it seems that the Indian leadership has purposefully decided to be vision less with regard to gold and land, the two detrimental forces of economic development !

Detrimental when dealt without vision !

Give a thought to this,  dear ladies and leaders !

[View the linked list of all Blogs of the Author Here ! ]

1 comment:

  1. Marvelous work!. Blog is brilliantly written and provides all necessary information I really like this site. Thanks for sharing this useful post.


Your comments are welcome. Express your opinions publicly, but responsibly. Comment moderation is applied and inappropriate comments do not get published.