And for a Friday as speculations of the Union Budget abound, some thoughts….. some musings…..
Every budget the Finance Minister looks to satisfy often competing stake holders; more revenue netting vs tax concessions, fiscal prudence vs freebies to targeted voters. The secrecy over the budget preparations and anticipations have substantially and systematically reduced over the last few years. Most reforms and policy changes are announced well in advance and Feb 1st as budget with April 1 as the new financial year gives sufficient readjustment opportunities. But overriding all other factors at the core of Indian economic system is GOLD. India has more than 25,000 MTs of idle Gold, stashed in many almirahs and lockers across the country. Yet, every year we officially further import 3.4 lakh crores worth of Gold causing a huge budget deficit. Will there be any novel scheme????
Gold and Indian family system is completely intertwined. Irrespective of many Govt schemes introduced to lure investors away from physical Gold, the craze for Gold as a safety investment continues unabated. RBI Sovereign Gold Bond is an excellent investment in Gold without the hassles of keeping physical Gold. It guarantees the prevailing market price, yields a 2% annual return and at the end of the 8 year lock-in period, the profit made is completely tax free. In India there is no limit of the quantity of Gold and Jewelry one can officially keep. However, in every family a married woman can keep 500 grams without any proof of purchase, unmarried woman 250 grams and a male member 100 grams. From July 2022, It is compulsory for all Jewelers to sell only HUID (Hallmark Unique Identification) jewelry. Every piece of Jewelry sold must have a unique six digit alphanumeric code. This not only ensures safety to every purchaser, but over a period of time will help eliminate spurious and smuggled Gold.
It’s time that every Indian family re-looks at its Gold purchase policy, the source, repurchase mechanism of the Jeweller and the availability of the 6 digit alphanumeric code. Let’s all be financially savvy. Let’s move away from just Gold and FDs to better financial saving instruments, the intelligent way, the prudent way, the SEEGOS way.