Indian economy : Increasing Gold Imports

India's gold imports increased by 38% in the second quarter of 2011, as investors continue to invest in the yellow hedge against inflation. According to the World Gold Council, India's gold imports rose by 60% in April-June 2011 from a year ago. 

It seems that gold imports in India continues to soar. Marcus Grubb, Managing Director, Investment, World Gold Council in a press release commented, "The power demand in India and China, together with a general decline in recycling activity in this quarter, shows that consumers have adapted to the current price environment and expect that prices will continue. In addition to current macroeconomic uncertainty, continued debt crisis and widespread inflation pressures, demand for gold remains strong. " 

But the yellow metal may have belonged to one of the factors that lower growth rates in India. Holding their savings in gold is a social waste, "said the economist said. The amount of gold imported to the deteriorating current account deficit. 

"Gold is money used mostly wasted, because it is not just hoarded, and financial inter-mediation at the same time," India's Economic Times quoted Abheek Baru, Chief Economist, HDFC Bank saying.The the fact that India does not produce much gold, but most of the import stuff leaks in the economy increases. "If instead the money was spent on other assets such as home, money would be distributed in the economy," says Sunil Sinha, senior economist with Crisil, the rating agency said the Economic Times.