Relaxation of Gold Control has added a new factor to the economic system and its final effects are not yet fully possible to determine. Gold control relaxation has given new impetus to Indian economy.People can buy gold and use it for business and ornamental purpose,it spells freedom of economic operations.
It’s many a times not acceptable to have government interfering with control of gold,because that pegs up prices of artificial level which are not good for the country.Through relaxation of gold control,prices are finding their natural ceiling and floors.This natural flow of gold will go a long way to stabilize prices in general and give value to our industrial production.
Poor currency by itself is quite meaningless.A bundle of currency notes has not much of economic value.Paper currency represents a certain amount of gold or silver which the government should be able to give in exchange of a currency note or which a person can buy in open market.
The value of currency is losing it’s value year after year due to inflationary spiral of economic prices.Through action of gold the Reserve Bank of India is enabling people to know the value of their hoards in terms of yellow metal which spells the real pricing throughout the world.
It is notable that gold prices have risen in India after the relaxation of gold control.The price of smuggled gold was not as high as it is now after the Reserve Bank of India has unloaded it’s tons of gold has risen after relaxation of gold control instead of falling,which was the real expectation of the government of India,it shows that the policy of relaxation of gold control is a miserable failure.
The relaxation of gold control has it’s own good and bad aftermath.Though by selling gold,the government is reducing the volume of paper currency in the hands of the black marketeers.
Gold control relaxation does restore the faith of the people in the sincerity of the government and it’s political stability.When the government controls gold too tight or too loose,people too loose faith in the currency system of the country.
– Pranchal Joshi.
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