Context
The article argues that India’s gold reserves and household savings in gold can be mobilized to finance India’s next phase of Aatmanirbhar Bharat (self-reliance). It suggests that a revitalized, trust-based gold monetisation scheme can strengthen India’s economic independence by converting idle gold wealth into productive capital.
Key Highlights
- Gold and India’s Self-Reliance Journey
- Aatmanirbhar Bharat (Self-reliant India) has been a central pillar of India’s growth story—from the Green Revolution and indigenous vaccine production to advances in digital and manufacturing sectors.
- The next phase of self-reliance must address external capital dependence, especially as global investment flows shrink amid geopolitical and financial turbulence.
- The Immense Value of India’s Gold
- Indian households collectively hold around 25,000 tonnes of gold, worth about 55% of India’s GDP (FY26 est.), far exceeding total bank credit.
- Despite such reserves, India remains one of the largest importers of gold, causing a major current account deficit.
- Imports of gold account for 8% of India’s total import bill.
- Gold Monetisation: A Missed Opportunity
- Previous gold monetisation schemes have failed due to low trust, complex procedures, and lack of transparency.
- The author proposes a revitalised, trust-based model that integrates three essentials:
- Reliable hallmarking and purity testing
- Simple, digitalised collection and return system
- Transparent regulation and “no-questions-asked” environment
- If structured properly, mobilised gold could reduce India’s borrowing costs (currently ~4.5–6.5%) and cut dependence on foreign capital.
- Economic Rationale
- The scheme could transform household gold into a national asset, similar to how the Green Revolution turned agricultural innovation into food security.
- Mobilising even a small portion of gold wealth could:
- Ease import pressure
- Improve the current account
- Create resources for infrastructure and innovation
- Borrowing costs would decline compared to raising funds from international markets.
- Broader Vision: Gold and Civilisational Self-Reliance
- Historically, India has used moments of crisis to spur self-reliance:
- 1960s droughts → Green Revolution
- 1990s crisis → Economic liberalisation
- COVID-19 → Indigenous vaccine capability
- The gold mobilisation initiative is positioned as the next major self-reliance milestone, merging cultural values of thrift and trust with modern financial systems.