New Delhi. Prime Minister Narendra Modi has started a new economic debate in the country by appealing to people not to buy gold for a year. India imports huge quantities of gold every year, which increases the pressure on foreign exchange reserves and the rupee. The government believes that if people go towards bank schemes, stock market or other investment options instead of gold, it will strengthen the country’s economy.
Prime Minister Narendra Modi on Wednesday appealed to the people not to buy gold for a year to strengthen the country’s economy. India is the world’s largest importer of gold and tonnes of gold comes from abroad during festival and wedding seasons. As a result, the country’s foreign exchange reserves are depleting and putting great pressure on the value of the rupee. It is in this background that Modi has taken this initiative to increase the economic strength of the country.
Every year, India has to pay lakhs of crores of rupees to foreign companies to import gold. This will increase the country’s current account deficit. The government’s calculation is that if instead of investing in gold, people invest in bank schemes or stock market, then that money will be used for the development of the country.
As we reduce purchases of gold, the value of the Indian rupee strengthens against the dollar. When the demand for dollars decreases in the market, the rupee will depreciate and the prices of imported petrol and gas will also fall. Its direct positive impact falls on the pocket of the common man.
According to market experts, if Indians heed Modi’s advice and stop buying gold for a year, demand may decline and prices may fall temporarily. However, considering the fluctuations in the international market, the price of 10 grams of gold is expected to reach in the range of Rs 85,000 to Rs 95,000 by 2027.
The government wants people to opt for digital gold or sovereign gold bonds and not keep it physically at home. This will reduce the import of gold and consumers will get safe investment as well as annual interest. This will be beneficial for both the country and the investors.
PM Modi’s call has created concern among jewellers. This could affect millions of families whose livelihoods depend on gold trading during weddings and festivals. However, the government is saying that this is only a temporary discipline of one year which will make the country economically stronger in the long run.
By 2027, the balance of supply and demand of gold in the market will depend on the decisions of the people. If this one year ‘Gold Fast’ is successful then there is no doubt that India will become the leading economy of the world economically. Whatever be the price at that time, India’s purchasing power will be higher.
The Prime Minister’s message is to leave the greed for gold and join hands for the development of the country. If you do not buy gold for a year, then this money can be used for roads, railways and education in the country. Instead of worrying about the price of gold in 2027, the real mantra now is how to lift the country’s economy.
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