The Truth About Gold And The Current Account Deficit
March 13, 2013 5 Comments
Our government would have us believe that it is the insatiable appetite of Indians for gold that is at the bottom of our balance of payment problems.Here is the truth and the figures have been put up by the RBI not any advocacy group with an agenda!
The net impact on trade deficit due to the domestic demand of gold is estimated at 0.3% of GDP. It is not perceived to be very significant. However, reducing this could bring down the current account deficit (CAD) — which reflects the gap between domestic savings and investments.
So how about some truth?Anybody for fiscal consolidation?Cutting down on wasteful government expenditure?Can we start out by ensuring that government servants opt for basic vehicles not glam ones and ordinary phones not Apple models,when these are bought out of government money?How about an audit of where exactly our subsidies have gone and who exactly has benefited from them?How about a little less corruption in government?As one stalwart put it why not a more tolerable level of corruption rather than the dacoity killing our economy?
About Keerthika Singaravel
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I wonder if the Indian government is under pressure by outsiders to try and get Indian citizens to spend? Gold is an investment that is difficult to spend. Investment to me is good.
The government having squandered its resources is now on the lookout to seize more.
A group desperate for money is bound to be easily buy able,
Don’t know if the Augusta deal and the case of the fleeing Italian Marines reached the UK,They are examples of how easily this government can be bought especially by Italians.
Undoubtedly a lot of countries would like to see Indians spend,but with stagflation rearing its head,its doubtful how far Indians can be made to spend.
The Italians have a reputation for corruption. The Augusta deal never reached my ears so I had to Google it. In UK people are not spending so much either.
More than the Italian penchant for corruption,its our Italian connections in government that allow such things to happen.
Indians are still spending, but its mostly people looking to drive bargains.