INDIA'S FINANCE MINISTER announced on Monday that there is a need to spread financial literacy in his country, encouraging wealthier people to invest in what he called "wealth generating" assets as opposed to Buying Gold.
The Economic Times quotes Pranab Mukherjee, speaking at a Zee TV awards ceremony on Saturday, as saying that "The quantum import of gold…is a clear indication [that] large sections of the community want to investment in an asset with expectations that the value would appreciate.
"The time is right to motivate our educated upper middle class to climb from saving mode to wealth generation mode."
Gold has delivered a 24% annual return over a five-year period and 20% per year over a 10-year horizon, says a recent report from Morgan Stanley analysts, beating equities which generated 4% and 19% respectively over the same time frames.
India's gold imports rose to $45 billion in 2011, most of it due to local demand for Buying Gold investments and jewelry. In order to check gold imports, the government has increased basic customs duty on gold bars from 2% to 4% so far in 2012.
"Over the past 10 years, Indian household gold consumption has increased at a compounded annual growth rate of 21%", says the Morgan Stanley study.
The report also shows that gold represented 10% of total household savings in 2011, with private ownership in the country totaling $1 trillion. Gold Buying has exceeded stock market savings in India 11 times over in the past three years.
Buying Gold for your savings today? "If there's an easier way, I've yet to find it," says one BullionVault user...
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