India Buys 200 tons of Gold to diversify its assets!

It was the summer of 1991, times were tough – well, for India. The country was struggling to make the payments on its international loans. With the fear of default on upcoming payments, India pawned its hard asset, the gold – 67 tons of it. To raise badly needed cash, India sold 47 tons gold to the Bank of England and 20 tons to the Union Bank of Switzerland. The total price -$600 millions.

For a person, or a family or a nation, the tough times always bring some tough tests, some tough choices. It is during the down times when resilience, endurance and willpower are tested. The real character – the real character of a person, a real character of a nation – emerges from the behavior and actions during challenging time.
So, what are the results of such tough tests? It is either a downward spiral that could lead to complete devastation, or a rise to glory from the ashes of down days.

The test of 1991 economic crisis fell on the shoulder of the newly appointed finance minister. Luckily, this time, it was not just another politician. It was someone who knew a thing or two about finances and economics. For a change, a man with financial vision took over the economy of a beaten down country. This man with a vision – the new Finance Minister – was none other than Dr. Manmohan Singh.

If you have watched the media interviews of his early days, if you have seen him talk about the state of Indian Economy, the touch choices and the value of rupee in the world market in early 1990s, you could tell that Manmohan Singh is no politician. He is a professor of economics, a man with financial wisdom – right man for the tough times of 1991.

What followed was the end of ‘License Raj’ – the end of red tape and meaningless regulations. The result of the economic crisis was a financial reform, a step in the right direction for once. The final results of his actions? – You be the judge.

18 years later, while world economy is in shambles, while US dollar is losing steam, India purchased 200 tons of gold. The International Monetary Fund (IMF) announced on November 2 that RBI has purchased 200 metric tons of gold to diversify its assets. This time, India can easily afford $6.7 billion, unlike the days of 1991.

18 years may sound a long time; may be it is a long time in terms of a human life. For a country however, 18 years represent a relatively short interval. In a short time of less than 2 decades, India has gone a full circle – from economic crisis to economic boom.

With an average annual GDP growth rate of about 6% for the past two decades, India is among the fastest growing economy in the world.

The world is taking a note of economic progress of India, and for the right reason. The proof is in the pudding. India – a world economic power, moving in the right direction, with a pace that rest of the world finds harder to keep up with.

With 200 tons of this shiny metal added to the reserves, the glow and shine of Indian glory is hard to ignore, hard to overlook.

.