Gold Control History
December 18, 2016 Leave a comment
On January 9, 1963, finance minister Morarji Desai announced in a nationwide broadcast that starting the next day the possession of gold — barring personal ornaments — without declaration would be illegal. A Gold Control Board was established with wide powers of investigation and seizure of persons as well as confiscation of gold. A comprehensive industry-wide regulation was also introduced. Its centrepiece: a ban on making and selling of jewellery above 14 carats, as against the prevailing trend of 22-carat ornaments.
As with the ongoing demonetisation, the policy was effectively decided by one leader who consulted few experts. This was partly because of the need to maintain secrecy and partly because Desai knew his own mind. Those who were taken into confidence turned out to be as enthusiastic about the move. Prominent among these was Chief Economic Adviser IG Patel. Read more of this post
In 1910 the British GOI increased the import tariffs on silver from 5% to 11%. A market report in 1912, by Pixley & Abell, a gold wholesaler, pointed to a 28% fall in silver demand in the Indian bazaars in the three years following the increase. They attributed this to not just a fall in demand for silver due to tax increases, but also a substitution of gold for silver in people’s savings as gold became more attractive on a relative basis.Between 1910 and 1930 net imports of silver in India fell from 98m ounces to 31m, according to British Geological Survey reports. After this time India gradually became the world’s largest gold consumer, a position it finally lost to China in 2015.
Only 30 percent of Indian gold jewellery is currently hallmarked and there are widespread differences in purity and an average under-caratage of anywhere from 10-15 percent.Some 80 percent of high value items are hallmarked, but for medium and low valued category only 10 percent is hallmarked.
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