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How the Indian family’s gold fixation is hurting the economy

Published Last updated This article is more than 2 years old.

73%: The share of Indian households in total savings in 2012-13. Indian household savings, the main source of funds for the economy’s growth, is failing to power the country’s economic engine as well as it did in the past. As families shift their investment preference towards gold and away from productive investments such as stocks and bonds, the domestic capital available for businesses has become expensive and scarce. While the quantum of household savings during the last five years has remained the same, at about a quarter of the GDP, one-sixth of this has moved into jewellery and bullion during this period.

If Asia third largest economy, now sputtering for over half a decade, has to race forward , it is imperative that this trend is reversed.

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