Photo: AP Images
India is still the world’s largest market for gold, with gold demand being driven by consumers rather than its central bank. Some argue that China is soon going to take over this mantle. And India’s finance minister Pranab Mukherjee has no problem with that.
Speaking at an awards ceremony, Mukherjee said (via iBNLive) that he regretted all of the inflows into gold.
He said that there is a need to promote financial literacy in the country and to push people to invest in market instruments – stocks, bonds, Forex etc.:
“Quantum of import of gold … is a clear indication (that) large section of community…want investment in dead asset only with expectation that value would appreciate.
…My request to financial analysts and other experts and leaders in this field is to ensure than we can create confidence in market, spread financial literacy, and merit of investment could be widely spread.”
Back in March, the Indian government attempted to double the gold import tax for the second time this year in an effort to reduce its current account deficit. Some expect gold demand to pick up once the Indian economy gets back on track, but sentiment among Indian policymakers seems decidedly to be going against gold.
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