Gold Conference
Gold to stay relevant as asset class owing to its ascending value, says CEA
This story was originally published at 12:47 IST on 3 March 2025
Register to read our real-time news.Informist, Monday, Mar. 3, 2025
NEW DELHI – Given the rising value of gold as an asset class, it is likely to serve as an "important portfolio diversification mechanism" in the coming days, Chief Economic Adviser to the Government V. Anantha Nageswaran said. The comment holds relevance in the context that the price of gold rose 8% in the last three months when the Indian stock prices fell over 8% during the same period.
"Today, not only policymakers think that they can print their way out of any trouble, investors also think that they are entitled to rising prices of assets of all types and, therefore, clamour for reliefs, forgetting the fact that the financial markets are a two-way street," Nageswaran said Monday at Gold and Gold Markets Conference, organised by Indian Institute of Management, Ahmedabad, and India Gold Policy Centre.
The government's top economist also said that beyond the importance of the yellow metal as an asset for investors or retail buyers, the commodity has a key role to play for the world as well as the Indian economy. According to him, currently the global debt-to-GDP ratio is in multiples of GDP growth, and when such high levels of debt accumulate, it becomes a deadweight as future earnings are required merely to service the debt and not so much is available for development expenditure. Additionally, countries will be tempted to use inflation as a means to pay down the real value of debt.
"So given that the fear of inflation is still there and the world is witnessing the after-effects and the consequences of policy discretion that commenced in 1973, gold's importance will continue to remain very salient and high," Nageswaran said.
As per the Indian government's statements of Fiscal Policy as required under the Fiscal Responsibility and Budget Management Act, 2003, the Centre's debt-to-GDP ratio in 2025-26 (Apr-Mar) is seen falling to 56.1% from 57.1% in FY25. At the same time, India's GDP growth is seen growing 6.5% in FY25 and in the range of 6.3-6.8% in FY26.
The chief economic adviser also said that hopefully india will find ways to "productively deploy" the gold assets that it has "without diluting its role as a symbol of store of value and cultural and religious significance and that is where the policy challenge lies."
He said that in all the government's gold monetisation efforts, it attempted to pay back the owners who deposited gold in currency form, but probably people attach different significance to gold and sometimes the government tend to forget that in policy deliberation. "That needs to be reflected on."
The government had announced Gold Monetisation Scheme in 2015, which allowed people to deposit their gold with banks to earn interest. The scheme aimed to reduce India's reliance on gold imports. End
Reported by Priyasmita Dutta
Edited by Deepshikha Bhardwaj
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
