Devalued UPA government may grab temple gold to shore up rupee – Debiprasad Nayak

Padmanabha Swamy Temple  Gopuram

Debiprasad NayakThere is no firm estimate of how much gold is held by Indian temples, but it is believed to be several thousand tons. In Sri Padmanabhaswamy temple in Kerala, where a large and intact hoard of temple treasure was discovered in 2011, there is estimated to be gold and jewelry valued at one trillion rupees (US$16billion.) – Debiprasad Nayak

Shoring up the rupee!At a time when nothing seems to be able to stem the Indian rupee’s decline, a novel idea to boost the currency is doing the rounds: use the tons of gold stashed away in people’s homes and in temples.

The rupee sank to an all-time low of 65.56 for one U.S. dollar on Thursday (before recovering slightly Friday,) partly on fears that India will find it tough to finance its wide current-account deficit; the gap reflects the fact that India imports more than its exports.

To lower the deficit, the Indian government has announced several steps in recent weeks to reduce its imports, such as raising the import duties on gold.

But market experts aren’t so sure that high prices will deter India’s gold buyers, so some people have come up with an alternate solution: recycle the gold already in India.

India currently holds around 20,000 tons of gold, according to the World Gold Council. At current prices, that would be worth $950 billion.

Reserve Bank of India Headquarters, New Delhi. A small piece of this gold – around 558 tons  or 2.79% – is held by the Reserve Bank of India, making it the 11th largest official owner of gold in the world, according to data from the World Gold Council and International Monetary Fund.

The rest is held by households and individuals, in their homes or bank vaults, and by Indian temples, which have historically received gold bars, coins and even jewelry as donations from patrons.

There is no firm estimate of how much gold is held by Indian temples, but it is believed to be several thousand tons. In Sri Padmanabhaswamy Temple in Kerala, where a large and intact hoard of temple treasure was discovered in 2011, there is estimated to be gold and jewelry valued at one trillion rupees (US$16billion.)

Jamal Mecklai, founder of Mumbai-based currency consulting firm Mecklai Financial, suggested that the Indian government should make use of some of this temple gold.

Tirumala Venkateswara TempleIn a commentary published last week, Mr. Mecklai said the government should ask the Tirupati Trust Foundation, linked to the eponymous south Indian temple, to deposit its gold stock with India’s state-run banks.

Mr. Mecklai said the banks could pay the Tirumala Tirupati Trust an interest for its gold, and then sell a large portion of the stock in the domestic market – thus ultimately, reducing the need to import. Mr. Mecklai estimated that the Tirumala Tirupati Trust holds about 1,700 tons of gold, which would be worth around $81 billion.

On similar lines, an association of jewelers is suggesting that the government encourage individuals to deposit their gold jewelry with banks.

“If we will be able to bring out only 10% of the gold holdings, we don’t need to import any gold for the next two years,” Haresh Soni, chairman of the Mumbai-based All India Gems & Jewellery Trade Federation told India Real Time. Mr. Soni said he has submitted a plan to this effect to the government and some banks.

Indian banks already offer a so-called gold deposit scheme, in which they accept gold bars and jewelry from individuals and pay interest on it. But at the moment, banks require a minimum deposit of 500 grams of gold. Experts say this is too much Gold Jewelryto ask, since many individuals may want to deposit smaller quantities, say 100 to 200 grams.

Mr. Soni suggests that banks lower their minimum deposit required.

In another suggestion, London Bullion Market Association Chairman David Gornall told The Hindu Business Line newspaper that the Reserve Bank of India could swap the 200 tons of gold that it had bought from the International Monetary fund in 2009, for dollars. This will boost dollar inflows at a time, when foreign investors are taking out the greenback from the country. – WSJ Blog, 26 August 2013

10 Responses

  1. Reblogged this on VINOD833's BLOG and commented:
    this is not fair according to people’s sentiment

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  2. OK, I have moved the link to the article to the top of the Post Contents Page 3.

    The short link for the article is http://wp.me/pEi6D-9yd

    Like

  3. IS, please place this article again

    http://pakobserver.net/detailnews.asp?id=161294

    Sonia’s $12b gift to Europe
    Geopolitical notes from India
    M D Nalapat

    Blood is thicker than water, so it is not surprising that Sonia Gandhi’s heart is firmly anchored in Europe, the continent of her birth. Almost every month, there are house guests from Europe in 10 Janpath, the stately mansion that has been set aside by successive governments in India to provide the widow of former Prime Minister Rajiv Gandhi a home. Now that Sonia’s two children are well into adulthood, the Manmohan Singh government has allocated two other bungalows for them, for daughter Priyanka and son Rahul to use as and when they deem it neccessary

    ………………………………………………………………………………………….

    Of course, for the same reason why the media in India is quiet, so are the so-called “Opposition” parties, none of whom have protested with any vigour at this destructive decision. According to senior officials within the government,the $12 billion handed over to certain European states via the IMF will soon be joined by a further tranche of $10 billiion, discussions for which are going on. If it were not that the human consequences of such decisions on hundreds of millions of semi-starved people are so tragic, it could be termed the Theatre of the Absurd. A country with 300 million at starvation level throwing away huge dollops of cash at countries where the population enjoys an infinitely better life. Those that have will get mire, while those that are poor will find themselves even more worse off. This seems to be the logic of present-day geopolitics.

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  4. I am sorry to say, the BJP is just a barking dog with different heads, each barking differently. Let them list one Issue where they defended Hindu interests, seriously, fully, and successfully. Kashmir Pandits? Ayodhya? Kasi, Mathura temples? common civil code? Art.370? cow slaughter? I can only quote:

    “And be these juggling fiends no more believ’d
    That palter with us in a double sense;
    That keep the word of promise to our ear
    And break it to our hope.”
    (Shakespeare: Macbeth.)

    If we still believe BJP, it will be triumph of hope over experience.

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  5. Very good point. The churches have a lot of gold too, though most of their wealth is in prime urban property as stated. The local belief is that the fake St. Thomas tomb in Mylapore is full of stolen Hindu gold already from Portuguese times. The government must get out their metal detectors and take a look.

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  6. Swamiji

    Why Hindus or their Devas and Devis will only sacrifice when it comes to save the nation from going to dogs? Why do Muslims and Christians not make the sacrifice? If the Hindus only to make sacrifice then let the Govt. declare India as a Hindu nation first. In that event it becomes the duty of Hindus to save India. However, past records say that it is the Hindus who have always made all the sacrifices to save the secular India though the Muslim and Christian parasites reap the benefits of the sacrifice of the Hindus.

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  7. The current economic crisis and dip in rupee value is because of mismanagement of the finances of the government by P Chidambaram, Manmohan and Sonia and other corrupt ministers. They are the ones to be arrested and tried for sedition.

    Honest Indians trying to protect their money value by putting a part of it into real estate and gold aren’t doing any crime.

    If gold is an asset, real estate is also an asset. The Church is the largest private land-holder in the country, Why doesn’t the government try to confiscate the church properties which are at prime locations in cities and which were anyway given to them by the colonial governments in the first place? Even if a small fraction of the church properties in prime locations are sold, it will bring in enough money to finance the Current Account Deficit. Why does Jesus require prime property to herd his sheep?

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  8. We will oppose govt’s move to take over gold from temples: BJP — TOI-PTI — 31 August 2013, Hyderabad, AP

    The BJP will oppose government’s reported move to take into possession the gold belonging to some temples in a bid to mitigate the crisis caused by the yellow metal, Subramanian Swamy, former union minister and BJP leader said here on Saturday.

    Recently, Prime Minister Manmohan Singh said that the current account deficit is mainly on account of huge imports of gold, coal and higher cost of crude oil. Recently, RBI has also imposed certain curbs to discourage gold imports. All these measures were aimed at strengthening the rupee against the dollar.

    “Government should not take gold from temples. These (acts) are anti-national. We will all oppose it. We will challenge it in the court. They already tried to gold-coat the Tirupati temple, but courts have stopped it,” Swamy told reporters on the sidelines of a meeting here.

    Referring to media reports that RBI is discussing with banks on how to convince temple trusts to deposit their hoard of idle jewellery that could be converted into bullion, Swamy said if the government is serious about solving the foreign exchange crisis, it should ask the people at the helm of affairs to return the deposits they made in foreign banks.

    Earlier, delivering a lecture on ‘Declining Rupee value-UPA Government Failure’, Swamy suggested that RBI should take initiative to sell at least $20 billion of its foreign reserves to tame dollar.

    “They should do it in one blow so that it comes down to Rs 50 (per dollar) in which ways all these profiteers will lose their wealth,” Swamy opined. Currently the dollar is trading at Rs 65.70.

    He also suggested that the Government should abolish P-Notes which are said to be root cause for the forex crisis. P-Notes or participatory notes are the instruments used by investors or hedge funds that are not registered with the Securities and Exchange Board of India (Sebi) to invest in Indian securities.

    The BJP leader said these notes are one of the reasons for rupee fall and hence the government should discourage them.

    Describing the UPA government as “failure” in handling the financial crisis, Swamy opined that large-scale corruption has contributed to rupee fall

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  9. The Congress government should not be permitted to put its very dirty hands on temple gold. The gold belongs to the Gods whom this corrupt secular government abuses and holds in contempt.

    The government can ask its son-in-law Robert Vadra for a loan. Or better still, Rahul Baba can bring back his billions stored in the Pictet Bank in Zurich.

    It is said there is some Rs 24.5 lakh crore kept abroad by Indian citizens. This money can be brought back from Singapore, Maldives, Mauritius, Hong Kong, UAE, Liechtenstein, British Virgin Islands, Bahamas, Channel Islands, New Zealand, Switzerland and wherever else it is hidden and integrated back into the Indian economy.

    The reason the money is not repatriated is because the names of the foreign bank account holders would be revealed. These names include very important persons in government, politics, high society, and big business. So a system should be devised to repatriate the money anonymously. Bringing back the money is the very least these wealthy people could do for the country in its time of need.

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