This might be acceptable if there were no other alternative, but India has a more attractive option. India's Gold Reserves India's love of gold makes it unique among developing nations. It is a country in search of enormous sums of foreign investment to support further investment in infrastructure, while at the same time even greater sums are being held by the public in the form of non-productive savings as gold. This huge reserve represents national savings taken out of circulation and unavailable for further investment in the nation's development. The gold saving habit continues unabated.
Gold has both a financial and sentimental value in India.
It is a hedge against inflation and devaluation of the rupee. In the form of women's jewelry it is also a traditional symbol of economic security, wealth and social prestige. Any effort to change savings habits has to address both these factors to be successful. Two strategies are presented for tapping this huge reservoir to support developmental investments. Incremental Strategy to Reduce Additional Savings as Gold India's gold pool is growing every year as new families are formed and new wealth is converted into jewelry.