Prime Minister Narendra Modi’s lie that the Congress party’s election manifesto promises to usurp people’s gold, women’s mangalsutras and redistribute it to religious minorities is blatantly egregious, dangerously mischievous and morally reckless. Not only is Modi’s claim despicable but it is also a ‘golden irony’. It turns out that it is during Modi’s tenure that Indian families have had to mortgage their gold to the maximum. To put it starkly, it is Modi who may have actually snatched away women’s mangalsutras and families’ gold.
By now, it is no surprise that a nervous Modi is prone to extreme absurdities in his public speeches. The ‘punish me if I don’t bring back black money in 50 days’ speech days after he realised his demonetisation experiment was a disaster, the ‘Mahabarata war was won in 18 days, corona war will be won in 21 days’ panic speech before lockdown or the ‘didi o didi’ ugly taunt in a losing Bengal election are just a few recent examples of a worried Modi’s desperate addresses.
His absurd claim that the Congress will appropriate people’s gold and hand it over to Muslims is yet another clear sign of desperation. But one that is extraordinarily dangerous and rash. Modi’s lie cannot be dismissed nonchalantly as mere political rhetoric in the heat of the elections. The dog whistle was loud and clear – polarise voters along religious lines using the sacred symbol of Hindu womanhood, the mangalsutra, and the quintessential cultural symbol of wealth in Indian families, gold. Amplified by the BJP’s system that propagates hate on a large scale through the dark web of WhatsApp groups, this can possibly trigger extreme communal tensions and violence, leading to dire social consequences.
Gold loans multiplied under Modi
‘Selling the family silver’ is an English idiom to denote desperate times, which in India equates to ‘mortgaging the family gold’. Which is exactly what Indian families have been doing at an alarmingly rapid pace recently. As per data from the Reserve Bank of India, Indians mortgaged their gold jewellery to borrow more than Rs 1 lakh crore in 2023-24, nearly five times more than they did in 2018-19. This is the fastest growth in gold loans in recent history and the RBI had to step in and issue warnings to banks and other financial institutions. The share of gold loans in overall personal loans multiplied nearly two and half times from 1 per cent in March 2019 to roughly 2.5 per cent in March 2021 during Covid-19 and to 2 per cent in February 2024.
It is a cultural and social blasphemy in India for families to be driven to the ‘pawn broker’ to mortgage the family jewellery and take cash to tide over difficult times. It is only under extremely onerous financial conditions that families are forced to take this step. This is reflected in the RBI data where the share of gold mortgage for personal loans reached its peak during Covid, when economic conditions were brutal. So, why then are Indian families continuing to mortgage their gold to borrow at such an alarming pace even now? To add, this is just the formal lending channel for which RBI captures data. It is well known that a majority of such borrowing against family gold happens through informal channels known as ‘pawn broking’. When people with access to formal lending channels are being forced to mortgage their gold so heavily, one wonders how rampant is such gold loan borrowing in the informal channels that the large majority of lower middle-class Indians rely upon.
Modi supporters may attempt to dismiss this data as merely a reflection of a greater push for gold borrowing by financial institutions and a shift in borrowing preferences of families, not a sign of family distress. Even if true, this does not fully explain the worrying growth in gold mortgages. The fact that gold loans shot up starkly during Covid and dropped immediately the year after correlates well with economic distress factors and is not just a sign of greater availability of formal channels for mortgaging gold.
Also read: Where is Modi’s report card? He’s hiding it behind mangalsutra, Muslims, mass distractions
Modi snatching gold jewellery
The other significant data point is that India’s gold imports are also down 20 per cent (by volume) in the last five years. India is the world’s largest consumer of gold and greater household demand for gold results in higher gold imports. Of course, greater household demand for gold is a function of higher incomes and savings for families. According to data by the Ministry of Commerce, during Manmohan Singh’s tenure, gold imports rose 24 per cent by volume and 224 per cent by value between UPA 1 and UPA 2. Meanwhile, in Modi’s tenure, there has been a decline in gold imports by volume and only a 38 per cent increase by value, driven by rising gold prices.
Admittedly, there can be many other factors that influence gold imports such as gold prices, import duties and so on. Nevertheless, when viewed in combination with other macroeconomic data of falling household savings and stagnant real incomes, it is not far-fetched to impute that household gold demand was also tepid, leading to a decline in gold imports by volume. In simple terms, household demand for gold was higher during Manmohan Singh’s tenure than during Modi’s. That is, Indian families accumulated more gold under Manmohan Singh while they mortgaged their gold more under Modi.
So, for all the hullabaloo about a Congress plot to take women’s mangalsutras, data shows that it is Modi who is snatching families’ gold jewellery and their proverbial mangalsutras. And this is not a baseless charge levied in a political speech but founded on actual data from the RBI. Now, if only politics and elections were driven by facts and truths, perhaps Indian families would have accumulated more gold than having to mortgage by electing the better economic managers.
Praveen Chakravarty is a political economist and a senior office bearer of the Congress party. He tweets @pravchak. Views are personal.
(Edited by Zoya Bhatti)
He is not a political economist, only a Congress politician to put up such an absurd, baseless and facts twisting argument…. It is only common sense to know that majority of Indians have entered the formal economy thanks to the financial inclusion plan under Jan Dhan Yojana and UPI, which explain the increase in gold loans under formal channels and correspondingly decreased under pawn broking.
Dear Print,
This article stands in contradiction to your proclamation of unbiased journalism.
This author is an ultra left communist .
His language is vitriolic to say the least.
Utterly disappointing.
Vin
Reckless and biased article. The bitterness oozed by the author is clearly visible. The publication seems to promote yellow journalism by promoting such inflammatory viewpoint. We also heard PM speech, there is nothing what this author tries to insist upon.
Dear Print,
How you are publishing these type of articles in your Paper. How this author can say modi taken the gold which is mortgaged in bank for peoples requirements. He should not see the value of mortgaged gold because gold values increased recent years abnormally, Gold import also have the impact of COVID19.
Mr. Chakravarti forgot that when you use gold as a lien, you still own it. Rahul Gandhi instead by way of X-ray wants to know about your assets and redistribute it
Yesterday’s article is a skewed opinion on the fact. people are pledging gold , taking loan, doing business as the amount of loan is high due to increase in gold prices.
Please check the demand for Gold in the March qtr when the rates have risen
Please check the delinquency in gold loans.
You seem to be a very intelligent man but what is the use of intelligence when it us not for the greater good of your Community and focused only on your personal targets and believe me you will not be able to run from the consequences.