jairamesh Posted April 26, 2012 Posted April 26, 2012 I didnt get your point. What needs to be changed to implement the proposal you're suggesting? It's basically reverting back to a hybrid of the gold standard, RBI supplying rupees in exchange of gold from the average person on the street. It's unlikely to happen, due to vested interests from IMF to US Fed Reserve. There are also good reasons to avoid the gold standard, as it hampers credit lines/money supply. But it does keep inflation in check. But for India, legalizing gold as official tender can certainly boost domestic consumption and investment and tax revenues. The price of gold would also shoot-up (via demand for it) hence making gold holders ever more wealthier. The gold standard had fixed price (currency) attached to the weight of gold. I say use international market prices (as long they don't revert to the gold standard). There are parties already taking payments in gold (mainly in real estate) bypassing official routes via banks hence state and central government missing out on valuable tax revenues.
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