India should imaginatively put to use its vast and mostly unaccounted gold to enable the gold and jewellery trade to join the ‘Make in India’ campaign in a meaningful way.

The country has stocks variously estimated at 30,000 to 50,000 tonnes, said MP Ahammed, Chairman, Malabar Group, whose flagship Malabar Gold and Diamonds is among the largest gold retailing businesses with 126 outlets here and abroad.

Gold lease “The annual demand is 800 tonnes. In order to feed this, the government should unearth the vast stock and make it available for recycling,” Ahammed told Business Line here.

Suitably crafted amnesty schemes would encourage hoarders to part with their stock. The recovered gold can be leased out to jewelleries and shall be returnable. This will help the gold manufacturing sector and more than 60 lakh persons engaged by it in a big way.

Indian art, designs and handmade ornaments are very popular abroad. The potential is really high. “Make ornaments here and export them. This will create jobs and also help the country deal with current account mismatches.”

Malabar Gold and Diamonds would like to lead from the front in pushing a made-in-India brand abroad.

US scenario India is among the richest in the world in terms of the gold it owns. Official gold reserves at the US Mint are nearly 9,000 tonnes.

There is no comparison in terms of absolute numbers – a hoard of up to 50,000 tonnes here (but Reserve Bank of India has less than 600 tonnes) against official 9,000 tonnes in the US.

The big difference is that the entire stocks in the US rests with the government while in India most of it is in private hands. The gold provides the US economy the muscle and it can afford to print dollars when warranted without unduly inflating its economy.

The reverse is true here in India, which requires both the government and the RBI to give a long and hard look at the hoarded gold. Ahammed says the trade is not able to speak in one voice on this to the government since not all of its members follow fair practices.

Trade ethics Those who opt to float IPOs alone have had the guts to declare that their stocks are open to scrutiny.

“I would say that as much as 90 per cent of the gold is unaccounted for. In Kerala, it could be 70 per cent. But the state government is promoting unethical trade practices by fixing tax unconscionably high. Why should people pay at this rate?”

Responding to a question, Ahammed said that Malabar ‘does not entirely rule out an IPO in the near future’ but prefers to first develop and consolidate its brand and establish a presence worldwide.

“We already have more than 1,000 investors thanks to the retail franchising model. We are more like a public company in terms of the profile and work style.”

On the other hand, venture capitalists have been approaching the gold retailer. “We’re evaluating some of those proposals.”

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