Since the beginning of Indian civilization, gold and silver was the primary means of savings for households. Gold and silver were transferred from generations to generations. The sum total of all gold in India is said to be in excess of 18,000 tons which is close to 1/3rd of the entire gold mined in history. The value of gold is said to be in excess of $1 Trillion.
Since the financial crisis in 2008-09, Indian balance of payments has been turning more and more negative reaching $180 Billion in 2011-12. Gold imports were a major part for the large trade deficit and accounts for almost whole of the current account deficit. The Indian goverment as usual wants to restrict gold and silver imports.
However years of inflation, currency debasement and loose monetary policy has resulted in Gold and Silver being the best asset class in India for the common man.
Rs 100 worth Gold in 1970 would have become Rs 10,000 in 2010, a performance which is unrivalled across asset classes including real estate and equities.
