The Gold Crush Of Indians English Language Essay

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A recent Assocham Associated Chambers of Commerce Industry of India study titled Indian gold rush its impact and sustainability reveals some interesting facts about Indians craze for this Yellow metal.

India imports more gold than the annual budgeted expenditure outlay on water supply, urban development and sanitation.

Indias gold demand is 37.6 per cent more than Chinas although Chinas GDP is 3.5 times of Indias GDP.

Compared with the US, which has a $14 trillion economy, ten times the size of Indian economy, Indias gold demand is almost five times.

According to World Gold council (WGC), India remains the largest country for demand with 933.4 tonnes in 2011.

Being the largest importer of gold in the world, India accounts for nearly one third of the annual demand with import bill rising from $4.1 billion in 2001-02 to $ 33.8 billion in 2010-11.

Its surprising to know that about 70-85% of the gold import is used for making gold ornaments and finally it will be kept in safe lockers in banks and houses by the families. The craze for this yellow metal is not isolated to any one region but it can be seen all throughout the India. We can check out some reasons for this behaviour.

The gold rush is highly related to the Dowry system still prevailing deeply in the Indian family system. We can hardly find a marriage in an Indian family without a gold exhibition of at least 50-70 sovereigns.

If we check the history of gold in South Indian states like Kerala we can see that there has been a great change in the mind-set of people towards Gold. In earlier days a Hindu marriage ceremony of a middle class family included wearing a garland on brides neck, a thali made of gold and handing over a saree (Kerala set saree) .The only gold item in brides body will be that of a 2 -5 gm thali mala. But now things have changed, today it has become a mandatory among Hindu families to wear and decorate bride with a minimum of 50 sovereigns and an expensive silk saree .More the Gold, more the family status and pride.

The flow of NRI money has also contributed to this change in lifestyle as each family compete to gather more number of gold to showcase their newly owned family status and richness.

Other contributors for this development of gold crush attitude are the Jewellers and the Gold loan companies. After 10 years, its sure that the number of jewellery shops will be more than the number of restaurants in many Indian states. The prominent jewellers like Bhima, Josco, The Alukkas group, Malabar gold, GRT Jewellers etc are competing with each other to open up shops in every part of India and also in overseas too. They are now focussing in rural areas in order to tap the gold treasure in rural households. So one can buy jewellery from a walkable distance. These Jewellers have made sure that there should be at least of 5 ads of their shops in a half an hour TV telecast programme. The Jewellers have come with many innovative schemes to inculcate the habit of regular investment in gold like The GRT Gold Seed. In this scheme, a quantum of gold equivalent to the monthly deposit is credited to a customer account at the prevailing rate. It enables investors to buy grams of gold every month instead of buying at the end of maturity. As an incentive the jeweller foregoes wastage and making charges, besides footing the VAT on behalf of the customer.

Gold loan companies like Muthoot Group, Manappuram Group are actively into giving loans against gold. They are ready to give 90 % of loan against gold. Hence the common man find it easy to get money in case of emergency without waiting for long hours and submitting lots of documents as in a bank.

An interesting marketing idea for gold business is that of marketing some days like Akshaya tritiya, Dhanteras. About 5 years before we never heard of Akshaya Tritiya, but for the past so many years, the gold jewellery business people have left no stones unturned to attach so much importance to this day. Some 5 years ago, this day was spent as an ordinary day by the people. Then came the news that whoever buys gold on this auspicious day will get undiminishing wealth throughout the year. Although the public knows that it is an advertising gimmick to lure customers to gold, it has become a general rule to buy gold on Akshaya tritiya. After Dhanteras, this is the biggest gold buying festival in India. To celebrate the festival and boost sales amid record high gold prices, banks and jewellers alike have various discounts and offers for the consumers.

Let us see what people have to say about their gold buying behaviour and their interest towards this yellow metal. I did some telephonic interviews and email questionnaire.

We can see the gold crush reflected in the words of Ms.Sreeja S Nair, a 31 year Old housewife from Trivandrum, Kerala. She became excited and could not stop talking about gold. She says, Yes, I am deeply attracted to gold ornaments and I believe that Gold brings about beauty in a lady. More the gold more the satisfaction. Also I think that Gold is an investment for future and I have already started accumulating gold for my 4yr old daughter. Gold is a symbol of status, fashion and each marriage function is a platform for presenting one's collection of designer jewellery. If you wear more jewellery you will be the centre of attraction and it feels like walking in air. Old traditional jewellery is my favourite .These old fashioned jewels are unique and rare to get. Moreover they arose nostalgic feelings.

Rincy and shinju Ann Mathew from Bangalore and Cochin both representing younger Indian generation have a different opinion. Rincy who is going to get married this July says,"Eventhough gold enhance the beauty of a lady I dont like wearing too much jewels. I am planning to wear a thin golden chain and my favourite are studs. Light gold ornaments can be worn daily ,in work place,and suits in any dress .Shinju adds some points. "Not all ladies like jewels as even bible says women should wear less jewels. But we buy jewels regularly as an investment. I like modern jewels, and rings and bracelets are my weakness."

Alex George, a techie from Mumbai says, Å“We guys are interested in paper gold i.e. Gold ETF and debt funds. I dont care much about the gold madness of my girlfriend and I think its the inherent nature of ladies."

So whats the future of this Gold crush? Recently there has been a change in interest among the youth. College students prefer less weight, simple gold ornaments and diamonds to big gold jewelleries. And boys and gents are showing more interest in buying gold bracelets, chains. So we can see that the Gold crush will never stop in the coming years. Everyday Indians are eager to know the price of this yellow metal.

The another side of this Gold crush is that it has been disturbing our Indian economy for a long time now as it drains our foreign exchange reserve, create imbalance in BOP and can indirectly leads to depreciation of the Indian currency. So the need of the hour is to manage this crush for gold in us and seek for other options for investment.

It is wise to invest in gold and platinum but one should not be innocent enough to fall for blind beliefs and incur unnecessary expenditure. This yellow metal may or may not give you a never fading wealth but its sure that it can fade your peace of mind.

Sanjeev S

SDM IMD MYSORE

KARNATAKA

PH:8095763304

EMAIL: sanjeev12103@sdmimd.ac.in

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