The Gold Tax

The following is the work of Ila Patnaik,a professor at the National Institute of Public Finance and Policy, Delhi.It was published in today’s Indian Express.

These days it is fashionable to talk about how gold is draining away India’s precious forex,how gold is the refuge of black money and how opting for gold is somewhat anti-social and unpatriotic.I decided to post this article here to remind people of how gold has long been a good friend of Indians of all classes and especially of Indian women.Gold has been around a lot longer than the subject of economics and economists.Economic fads come and go but gold worked for our grandparents and will not fail us.Keep your gold.Hold it as bullion or high karat jewellery and keep it safe and do not be tempted,pursuaded or coerced to exchanging it for paper of any sort whether currency notes or gold deposit/accumulation schemes,ETFs,certificates or dematerialized units.

Having said my piece I will now leave you to get on with reading the article below

With increased import duties on gold, we return to pre-liberalisation thinking

The inflation crisis of the last six years, coupled with a persistent lack of financial inclusion alongside a decade of high GDP growth, has given an upsurge in demand for gold. The increase in custom duty on gold proposed by the Union budget, and the reduction in the loan-to-value ratio of gold loans by the RBI, will hurt the poor. Read more of this post