In india most of families have gold. There is a very high demand of gold in India. Indian buy gold all the year in festival,marriage etc.Then is investment in gold better than stock? Gold vs Stock: best option to invest in india. You can find the answer of such question in this article. Let’s start:
Consumption of gold in India is too high. Indian also use it as ornaments heavily. So india buy the gold mostly than other countries. And the gold that India buy is imported from the other countries of the world. So when you buy the gold the currency of India is gone out of india.
To grow of a country’s economy citizens of this country have to follow the cycle strictly.
Step 1: Earn money from business or salary.
Step 2: invest your profit in business/stock. market,mutual fund,startup or deposit money in bank. Because bank invest the money in loans,businesses,stock market etc. Again if you invest it in stock market,mutual funds,startup companies then the company can expand their business and can create new jobs. And people get the jobs and they surely get salary. And they invest some amount of their profit in stock market, startups, mutual funds etc. or deposit in bank. In this way the currency again flow in country’s economy and the economy become strong.
So that country follow the cycle economy of this country grow rapidly. But when you store the currency in home or buy the gold on the profit of your salary then the currency can not flow in economy. If you store the currency in home then you can not invest in stock market, mutual fund or startup. For this the above mentioned cycle will break and the economy of any country will not able to grow. On the other hand if you buy physical gold in india then the currency of india (rupees) will go out of india. Because india import the gold from other countries. For the economy it is worse that the currency of the country is gone out of the country. It means to buy gold is more dangerous than yo store money in home.
According to gold import report in financial year 2017-18 gold is imported in india in the amount of $33.65 Bn. And in financial year 2019 from april to june gold is imported in india in the amount of $11.45 Bn (81295 crore rupees). Averagely consumption of gold in india is about 800 tonne. It is huge quantity. After crude oil gold is the second largest importing equipment in india. For the huge importing of gold the trade deficit of india is increasing.
Trade deficit of any country means the difference between import and export of this country. If the import of any country is more than the export of this country then the trade deficit begin. It is bad for country’s economy. In financial year 2018-19 trade deficit of india is $176 Bn (1249600 crore). It is huge trade deficit in amount. If the economy of India is tried to grow rapidly then the trade deficit of india should have decreased. It is observed that import of gold and similiarly the trade deficit of india is increasing. It is bad for india’s economy. For this in india’s 2019 budget Goverment increased the gold import duty from 10% to 12.5%.
Goverment thought that the consumption of gold and trade deficit will decrease for the extra tax upon gold. But this plan did not work because people buy gold with extra tax continuously. It should have to stopped. So when you buy or invest in gold you break the cyvle of economy. So you should buy the gold that much you need minimum. Try to less consume the gold. As a investor it is bad idea to invest in gold. Because in india there is many stocks that return more than gold. Focus on those stocks. Do not harm the country’s economy. Deposit money in bank,FD or invest in stock market, mutual fund, ETF, startup, post office scheme etc and try to grow india’s economy.
Best wishes to invest.
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