Is fondness for gold hindering India's growth?

Every analysis has got its own beauty proving to be correct and wrong. If not it can’t be an analysis and no one will buy the same. Whereas, investment in gold there isn’t any productivity and of course, Yes! Investing in secondary stock market what productivity is there but a complete gambling and losing on every stage and come out empty handed?
Productivity in primary stock market, for example such a renowned, prestigious company like Reliance, in reliance power the share were issued at the rate of Rs. 400, 3 years ago and now in the secondary market being sold at Rs. 84
All is well, and nothing is right!

your views have cleared my confusion about gold saving. Still we need to educate Indian people for their better saving habits financial planning.

your article have served this purpose to some extent.

I have respected Equitymaster for its objective analysis and to provide an informed opinion; not to raise the debate initiated by the brain dead writer complaining that gold holding hinders GDP growth (i.e. someone who toes the line of government and central bankers who merrily issue IOUs at drop of the hat and then call that a 'currency' or 'legal tender' to facilitate economic growth!!)

After just 40 years, gold is regaining its role as a currency which is actually an asset, whose supply is determined by mother nature and which is beyond the control of legally authorised counterfeiters like Bernanke or our own RBI / Ministry of Finance combine.

The purpose of a dependable currency is to be a store the economic power a role taken by gold for thousands of years, not theft by stealth - which is what governments in India (and world at large) have done by legally counterfeiting of currencies

Sorry to say that Equitymaster in this instance, has actually failed in the current instance of stonglyly refuting these government sponsored plants and not being a meek opponent

I think you already provided answer in the second part.
Gold once saved India from defaulting (Chandra sekhar govt)
As K Patel viewed, house hold gold purchases are not equal to one Scam.
As Vinay told, without gold most families don't feel secure.
Definitely I never expected this loose article from you. Can you please some light on who is buying how much? (Rich Vs middle class families). You yourself will get right answer.
Don’t call multi millionaire families as Indian ‘Families’. They are investors (Greedy-as per your first part)
I think the writer would have not have had touch with middle class families of India.

Economists need to hammer home the point as to the LOSS to GDP when gold is purchased in physical form. Growth in incomes and GDP is not just based on quantum of money invested or saved BUT almost purely on the "rotations of each rupee within the economy before it ends up as a fixed asset". That is why services has such a string effect because in service industry almost 80% of turnover becomes in turn anothers income and this happens a few times. Gold is bought and kills money rotation. Articles that keep selling to individuals the idea that Gold is great investment must be countered by warnings that Gold is now just a temporary derivative cover for speculators and should be cashed out regularly and investments made in productive assets.

Is fondness for gold hindering India's growth?
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Dear Sir,
This is the best choice to thrive in the long run for our country, is, save only gold and import nothing other than the gold 100%, by it we will be the richest.As we are being rich we are entitle to eat Gold, lets enjoy eating Gold, because when we go for any edible import, again they raise their commodities as they wish and as we are being rich we very well afford to pay any amount of Barter. So lets Enjoy THE VALUABLE GOLD.
Thank you for the good posting.
Chandrasekaran.

Without doubt buying gold is a disaster for the economy . Imagine if it were mud instead of gold , we would be siting on large quantities of it and women could not even flaunt it ! Not so long ago it was pearls, diamonds, even women who were stocked in harems. But then where will the Gold and precious metal analysts go ?In India we have the absurd situation that gold import is taxed far lower than raw materials and capital goods ! This argument applies to all commodities in varying degrees so oil futures are as productive and today do not even serve the primary purpose of signaling demand supply mismatch . Is gold and all gold "fools" gold ? Only time will tell .

Reg gold being an unproductive asset, I feel the same. Indians accumulating gold is nothing new, but now, thanks to the uncertainty it has reached new levels. Also selling gold is seen as a last resort, when all other doors are shut. As for gold loans, how many people avail them? So, any purchase of gold means either for locker custody or jewellery purpose, both of which don,thelp the economy to grow. regds

Indians specially FEMALES HAVE inherent property
to love gold, this traditionally comes from very
early days.Gold as a currency used in time of
crisis either personal or for country like Indo
CHINA war in 1962.nothing harm in this thought.
Evil comes with gold trading.But after all it will
become beneficial in long run for development of
our country.

Hahaha.. DEBT takes an economy down and savings also take the economy down. its better to save then to have debt.. :) ) :)

And India's economy wont slow down just because people started having more money in GOLD. This is just to make an induced rally/fall in GOLD.

I keep hearing that GOLD has no industrial use at all. But why the hell BIGGIES always go to gold. :) :) :) There is some reason for that. GOLD was the currency standard earlier before DOLLAR and since there are no other currencies which can take what DOLLAR withstands, hence GOLD becomes a preferred choice.

GOLD is preferred because of its scarcity as well just like platinum or pallidium. Any thing in less supply will always find buyers and you gotta pay more.