RBI has recently formed a committee to study why Indians spend so much on Gold? What is the reason behind their appetite for this yellow metal? The panel will take into considerations all the facts and figures and also benchmark India’s position vis-a-vis both the peer and advanced countries, it said in a statement on Thursday.
Why Indians Love And Spend So Much On Gold?
The panel headed by Tarun Ramadorai, Professor of Financial Economics, University of Oxford will have embodiments from Sebi, financial sector regulators Irdai, PFRDA apart from RBI.
The committee will evaluate why, how and since when Indians have developed such a great affection with this metal.
The committee will be deliberated to go as deep as possible to find out the root cause of Indians household behaviors and their affection with the gold.
It is expected that the committee will likely to submit their reports by the end of July 2017.
The compulsion to form this committee has occurred due to the uprising consumption of gold in India for several decades.
With the constantly emerging demand for gold at the domestic level, the export of gold has increased multi-folds which have further put an extra burden on the Indian economy. Hence, in order to regulate the export of gold and encourage Indians to invest in Gold, last year the Government has launched a gold monetization scheme.
And, now setting up a committee to find out Indian’s affection for gold and gold jewelry is also being seen as an extension of Government gold regularizing policy.
The demand to form this committee was discussed during the meeting of the Sub Committee of Financial Stability and Development Council (FSDC-SC) held in April.
RBI in a statement stated that the focus of this committee will not only confined up to finding the root cause of Indian’s affection with gold, although it will be entitled to redesign of existing systems”. And plan out a new policy that encourages and enables better participation by households in formal financial markets.