Gold losing its sheen amongst Indians?
What's the story
With gold experiencing massive demand in India, the first and second quarter this year has seen plunging gold sales.
In 2015, Indians shelled out nearly Rs.55,036 crore, while this year, the expenditure more than halved to Rs.22,129 crore.
Gold imports have also fallen to 78 tones this year, with studies also reporting lower consumer demand.
Analysts attribute the fall to the government's gold policies.
Gold
India's tryst with gold
India has held a long-standing association with gold, with consumers ranging from tycoons to farmers banking on the shiny metal.
In 1982, the country consumed just about 65 tonnes of gold, but over the decades saw increasing demand.
After the 1990s, the prices of gold scripted a phenomenal rise.
Imports were banned till 1990, and could be the major reason for the sudden rise.
Do you know?
India splurging high on gold
In 2011, India imported a whopping 1,000 tonnes of gold, pitched to be more than any other country. This was almost the same amount of gold locked in Switzerland's central bank vaults.
Gold's significance
Why do Indians love gold so much?
Gold is pitched amongst Indians to be of good investment value, with reports citing it to deliver nearly 20% year-on-year returns.
The price of gold has scripted an increase every year from 2002 to 2011.
Since it's highly portable as an asset, it can be easily converted into cash.
Another investment boon is that gold is considered as safe choice to hedge against inflation.
Information
Gold's popularity as an asset
India, with its innumerable regulations and red tape, has consumers banking on gold to skip the regulations and documentation. Apart from property, gold assets are pitched to be harder to track for authorities, often resulting in tax evasion and corruption.
Policies
India's policy on gold
The Indian government recently brought out policies stating that any consumer who purchases gold valued over Rs.2 lakh would be required to submit their PAN details.
Last year, the government also introduced an excise duty of 1% on non-silver jewellery.
A scheme that enabled consumers to convert their gold into a financial instrument that reaped interest was also effected.