Indian Economy: News and Discussion (Apr 1 2011)

[Abhijeet]

Does anyone know if Bombay has these new and improved passport centers? I visited the Passport Office in Chennai this May. It was just as bad as vina remembers -- masses of people everywhere, no signs, long lines for everything.

Talking to a few other people at the Chennai PO, it appears that even if you do the "tatkal" application which is supposed to take a few days, your passport might not arrive for several months. There were a number of people waiting in line to talk to an officer to inquire why their passport had not arrived after several months, including people who had flights in the next few days to go abroad on work and couldn't go.

It's good to see that things are improving at least in Bangalore.

[vera_k]

Don't know about Mumbai, but Pune is just as bad as it used to be. A couple of decades ago when the Pune office was new and had a smart officer, it was great just like the BLR office now. You could even talk to the passport officer if need be. Then it went to seed and things slowed down.

[anishns]

^^^

Bombay passport issuing office at Worli was a big PIA with regards to the ECR stamp thingy (Emigration check required). Despite providing graduation certificate etc, the babu at Worli would deliberately issue the passport with the ECR stamp. Most Abdul's not aware of such a thing would get detained at the airport just before flying out and they would have to cancel the trip and go to the other passport office in Santacruz to get the ECR thing cancelled. Happened to a few people I knew...

Usually paying money to a tout who had connections inside would speed up the process. Don't know if things have changed since, as I had my passport issued back in 1998

[Dhiman]

Gold is deferred consumption.

A lot of India's wealth historically has been in the form of gold in temples where it just sits and does nothing until looted by foreign invaders (Islamic invaders, East India Company, etc). This is like pulling money out of productive use in economy and freezing it into a non-productive asset that will sit somewhere and do nothing.

Even today, the rich donate tons of gold every year to temples instead of putting it into more productive uses such as building a roads, improving hospitals, etc.

[Singha]

ECR stamp is supposed to be needed only for Govt servants and defence people maybe. it shouldnt apply to any lay person. that babu should have been jailed for 15 yrs RI for screwing up so many people's lives.

[Dileep]

Not really, Singha.

ECR system is a vestige of the old socialist republic mentality of preventing people to leave. When I was a kid, getting a passport was a bigg deal, akin to getting level 0 security clearance. You had to get a recommendation from your MP or a top state babu etc. Then, as things got liberalized, it was retained for people not having a graduate degree etc. The justification was to protect poor people being trafficked out. It is a valid reason too. I got ECNR because I had the degree certificate.

Right now, ECR is for less than 10th IIRC. The 'protector of immigrants' will review your purpose of visit and clear you, so that you aren't tricked into trafficking.

BUT, you can pay the rackets here at COK, and the immigration pandus will 'kick you up' (the literal translation of the mallu term 'chaviTTi kayattuka') without an ECS

[niran]

ECR was required if you did not attached your Graduate degree with the form.
but now ECR has been abolished for abduls, Defense and sarkari babu traveling on
sarkari money needs them.

[vishvak]

Gold is deferred consumption.

A lot of India's wealth historically has been in the form of gold in temples where it just sits and does nothing until looted by foreign invaders (Islamic invaders, East India Company, etc). This is like pulling money out of productive use in economy and freezing it into a non-productive asset that will sit somewhere and do nothing.

Even today, the rich donate tons of gold every year to temples instead of putting it into more productive uses such as building a roads, improving hospitals, etc.

If the rich donate tons of gold to deities, someone can not point a finger. It is for those who donate to decide what to do with their wealth.

About Indian wealth, has anyone counted how much % of money slips out of Indian white economy every year because of corruption, then calculate amount including simple/compound interest; before pointing finger at temple donations?

Is building roads/hospitals not the job of the Govt? This reasoning to point at temple wealth is not correct. Example, from 'It's a misnomer to call temple assets a treasure':

As a person involved in the history of Kerala, do you call what has been found in the cellars of the Sree Padmanabhaswamy Temple, a treasure?

The definition of treasure according to the Treasure Trove Act, is that treasures are valuables with doubtful ownership found below the earth. The valuables found in the cellars within temple walls, which were under lock and key and there are people authorised to hold the keys. So, how can it be a treasure? It is a misnomer to call it a treasure. I would like to call it temple assets with invaluable historical, archaeological, religious and cultural significance.

The Antiquities and Art Treasure Act of 1972 says that if you or any institution has artefacts or materials with cultural or historical value, the state has no problem in you possessing it. Nevertheless, you cannot misuse, melt or export them.

In other words, it is not 'gold' as it is, it is offering to deities. One can not value such gold by weight, etc.

How do you react to the opinion of some rationalists that the assets should be used for public use by building hospitals, schools etc?

Rationalists too can be irrational! It reflects a condition of too much imprisonment in the present. We fail to realise that societies, communities, families and institutions have broken down not just for economic reasons. Sometimes I feel the present Malayali society has little respect for their past.

We cannot destroy the assets by melting or selling them to 'solve' the present deficiencies and difficulties. It will not be much different from a thief stealing them for his/her own rational convictions!

Repeating, "It will not be much different from a thief stealing them for his/her own rational convictions!".

[Aditya_V]

[Self Deleted- My Bad]

[Dileep]

According to passport.gov.in, you need 10 grade school pass for ECNR.

[gakakkad]

^^^ My experience with the Ahmedabad passport office was good a few years ago . I needed a PCC certificate for US immigration visa. Form was lengthy . But things went on smoothly. However before getting the passport office police clearance we had to get one from the police commissioner. Dad had to make a few phone calls in that case to get the work done fast . So getting the work done at passport office was smoother than at pandu's office , as no influence peddling was needed.

[Hari Seldon]

The Hyderabad RPO simply has to be the absolute worst on the planet, bar none. JMTPs.

[Theo_Fidel]

I think the key observation is women on scooters. If you don't see it in a place, economic change is not happening. Sigh! When will our Heartland get with the program.

http://blogs.ft.com/beyond-brics/2011/0 ... z1XH21Hylx

To illustrate the point, Citi’s intrepid number-crunchers found a wonderful job in the UP state electricity department billed as ‘Post For Profit’. This is a “highly lucrative assignment (read corruption-friendly) in the electricity department”, says the report.

Among other nuggets, the following caught the eyes of beyondbrics:

- Most profitable local industry in a semi-urban location/agricultural hub, according to a local businessman: flour mill (50 per cent internal rate of return) – premised on not paying any taxes or electricity bills

- Second most profitable industry currently: brick kiln (40 per cent IRR) – no taxes or electricity bills here, either

- Chinese competition: omni-present, even for kite-flying line; estimated market share of Chinese mobile phone handset manufacturers in rural areas: 90 per cent

- Construction activity: very little visible, though Lucknow, the UP capital, has been rebuilt

- Honda scooters margins: low on the scooter, but 50 per cent on the 25 mandatory accessories

- Women seen riding two-wheelers: just two in the 500km ride – so no gains here in female workforce participation

- Power deficit of 15 per cent this year, against 8.5 per cent nationally

Remarkably, the Citi trio saw only one road accident on the way, which will be a relief to their employers. But they were mistaken for undercover tax inspectors, which may or may not enhance the bank’s credibility. And they did find the time to establish that luxury hotel rates in Lucknow are pretty much the same as in Mumbai.

[Suraj]

Hi folks, while vina's inspiring experience is great to read, let's not use this thread to discuss mundane passport issues. It's all about moderation when it comes to posting off topic.

[Prem]

Sarkari Jamai Babu

Workers Play Cards at Indian Factories as Asset Sales Founder

Each day, about 2,800 workers punch their time-cards in and out of Hindustan Cables Ltd.’s factories in India. They get paid, receive the occasional raise and eat in subsidized canteens, even though they produce nothing. The state-owned company, based in Kolkata, hasn’t made any cable since 2004 and has lost $549 million after cellular technology made its telephone wiring obsolete. Labor laws which the World Bank says are among the most restrictive anywhere and tortuous bankruptcy procedures, a legacy of India’s Soviet-era plan economy, mean the government can’t fire idle employees or sell assets such as machinery or land. While tolerance of unprofitable companies sits at odds with India’s status as the world’s second-fastest growing major economy, Prime Minister Manmohan Singh’s government, rocked by a spate of corruption scandals, may be wary of changing rules that keep many in jobs. About a third of India’s 249 state-owned firms that make everything from condoms to steel are losing money -- $3.4 billion in the most recent financial year -- just as the government misses a goal of raising $8.7 billion this year selling stakes in companies such as Oil & Natural Gas Corp., the nation’s biggest explorer.
“It is utterly crazy and everyone knows it’s crazy but there is nothing the government can do because of the labor laws,” said M. Govinda Rao, one of four members of India’s Economic Advisory Council to the Prime Minister, a panel which produces periodic reports for Singh’s administration. “The government is literally throwing money away.” Kishore Rungta, chairman and managing director of Hindustan Cables, declined to comment.

[Dhiman]

If the rich donate tons of gold to deities, someone can not point a finger. It is for those who donate to decide what to do with their wealth.

I have no problem with anyone donating anything to anyone or with temple wealth in specific. The problem is with money being taken out of economy in the form of non-productive asset (gold for example) that will just sit in one place and do nothing. Gold, as opposed to say a river dam or a power plant, is easy to loot and ship overseas either by corrupt officials or by East India types.

Now if rich were donating company stocks or rural electrification bonds, etc to the temples or if the temples would actually hire some investment managers and/or monetize its gold reserves in form of notes issued and backed up by all that gold in the vaults then it would be a different story, but as far as I know it just sits there in a dark vault and does absolutely nothing. That's like me taking all of my wages, buying gold bricks, and hoarding those gold bricks in a hole in my backyard while the rest of my family is starving.

[vishvak]

Now if rich were donating company stocks or rural electrification bonds, etc to the temples or if the temples would actually hire some investment managers and/or monetize its gold reserves in form of notes issued and backed up by all that gold in the vaults then it would be a different story, but as far as I know it just sits there in a dark vault and does absolutely nothing. That's like me taking all of my wages, buying gold bricks, and hoarding those gold bricks in a hole in my backyard while the rest of my family is starving.

Gold at temples belong to deities. One can not see it just as a 'treasure' & 'monetize' it.

What exactly has assets of deities got to do with notes issued? It is but a way for Hindu deity to 'share the risk of the whole world( including barbarians across the world) in this internetworked era', but not make 'profits from the world' by making even more gold out of profits?

The reason for 'temple gold to be monetized' has inherent contradictions. It is a one way street. One can not do so even in theory as all the profits from the 'monetizing' can not be back to the temple again in the form of Gold, by the same policy. It is like giving excuses to take gold away from temple in some kind of sham schemes.

That's like me taking all of my wages, buying gold bricks, and hoarding those gold bricks in a hole in my backyard while the rest of my family is starving.

'Those Gold bricks' belong to deities. Please read the message again here, it is like rationalizing stealing while the Govt policy is thrown to the dogs and corrupt dogs eat into society making others poor.

Assets of deities are no excuse for sorry state of affairs. In fact, temple assets could be at the most an indicator. If gold didn't increase, it meant that weak rulers could let invaders jump in and hoard it away along with slaves and what not.

By the way, any idea how much Gold India had before invasions pre 500 AD and where is currently Gold is distributed across the world. That could be an indicator too.

[Theo_Fidel]

Bit OT but...

Gold in Indian temples ended up financing all those Islamic armies that slaughtered their way through India. One can argue the moral aspect of it but I have often thought that if rulers had spent as much arming themselves militarily India would be much different place today. Hording wealth is not good for any economy unless it serves a purpose. Gold in private hands acts as an insurance policy, giving people confidence to spend and become consumers. Gold in Temples is not bad in itself as long as it is understood temple must serve the people. Several temples in my area, run feeding programs, orphanages, old women's homes, etc out of gold donated to deities. One temple recently built a new Gopuram out of temple gold. These are not bad things.

[devesh]

Theo ji,

brihaspati ji said something similar recently. the Anantha Padmanabha Swamy issue also highlights the same. the Travancore descendants today are playing holier-than-thou with all their statements about being servants to the lord, but in reality their sole concern was to fill coffers even if it meant giving shelter to inimical foreign elements.

[vishvak]

Bit OT but...

Gold in Indian temples ended up financing all those Islamic armies that slaughtered their way through India. One can argue the moral aspect of it but I have often thought that if rulers had spent as much arming themselves militarily India would be much different place today. Hording wealth is not good for any economy unless it serves a purpose. Gold in private hands acts as an insurance policy, giving people confidence to spend and become consumers. Gold in Temples is not bad in itself as long as it is understood temple must serve the people.

Sir, Gold in temples is not an excuse for anything. The Gold is of the deity, offered by Hindus and and nothing more, and hence can not be considered as a treasure by anyone. That barbarians considered it so is also not an excuse to think in the manner.

"Gold in Temples is not bad in itself as long as it is understood temple must serve the people." how can anyone decide this? Serving the people is today job of the Government, I hope this is understood. What is bad is that temple wealth is used to do public-works when people paid taxes too separately - which is ethically more important to understand.

If Gold is used for something else, it is perhaps only an indicator that things are not going smoothly. Earlier it used to be invaders but today an independent state is present. Are the temples making the most of it by strengthening dharma? Why would gold of temple be used for public works, thereby depleting the temple assets and increasing corruption of Govt. full of people who do not want to do their job well?

One can argue the moral aspect of it but I have often thought that if rulers had spent as much arming themselves militarily India would be much different place today.

Once it is clear how Gold could be used to arm, it could be clearer that there were always some ways to it - Gold is not an excuse not to understand this.

In Indian History when gold in temples increased, it was due to general wealth all around, not because gold was looted from Arabs & Europeans, unlike what might be in History of invaders who did loot others. Similarly, gold in temples vanished because invaders broke down temples in guise of looting gold.

According to me, using temple gold for anything other than strengthening dharma is an excuse. I do not want to buy this logic of gold causing invasions when it is those psycho invaders who were at fault.

Tomorrow, one can also rationalize that invaders also came for slaves so would it be now pertinent that Hindus decrease in numbers? There is no connection here.

[paramu]

Now if rich were donating company stocks or rural electrification bonds, etc to the temples or if the temples would actually hire some investment managers and/or monetize its gold reserves in form of notes issued and backed up by all that gold in the vaults then it would be a different story, but as far as I know it just sits there in a dark vault and does absolutely nothing.

Last thing I want is some Goldman Sucks type of guys robbing our temple of its gold legally. All I would support is temples spending their money to preserve and protect traditions. Poverty exists, not because our temples are not spending its wealth, but due to deep rooted corruption in the system. Even if you spend entire wealth of the temples, the poverty won't go away if you don't fix that root cause. Address that to remove poverty and not quick bucks for an investment manager.

Will some financial wizguy come later and say that temples do not produce anything and are economic waste? Let us replace them with some factories or businesses.

[Dhiman]

Even if you spend entire wealth of the temples, the poverty won't go away

Let's assume that horded wealth (which has absolutely zero influence in economy) in India is:

$100 billion: You could revamp the entire railway system in India cutting travel times in half thereby giving a major boost to the economy of the country and hence reducing poverty. And all this while giving employment to at least 100,000 people.

$200 billion, then both railway and road systems can be revamped.

$300 billion: revamp roads, railways, and entire water supply system of the country.

$400 billion: all of the above + clean up and link all major rivers.

....

$1 trillion: revamp the entire physical infrastructure (roads, railways, ports, airports, electricity, river cleanup, forestation) of the country. After this you would think that you are living in a Dharmic heaven

[Airavat]

Monsoon retreat delayed by two weeks

“Normally, the southwest monsoon starts withdrawing from the western parts of Rajasthan around September 1. However, current and prognostic meteorological conditions indicate that the withdrawal of monsoon (this year) will be delayed,” the Indian Meteorological Department said in a statement. It said a low pressure area had developed over south Pakistan and adjoining southwest Rajasthan and Kutch region, while another low pressure area had formed over Jharkhand and Gangetic West Bengal.

Rainfall activity over northwest India is likely to decrease from September 17.

Monsoon has a huge impact on the economy. Recharging water sources, boosting farm incomes, providing a host of seasonal fruits, reducing construction activity, lowering cement prices, and lowering temperatures by more than 10 degrees. One reason why beer sales fall during the monsoon.

[vishvak]

Even if you spend entire wealth of the temples, the poverty won't go away

Let's assume that horded wealth (which has absolutely zero influence in economy) in India is:

$100 billion: You could revamp the entire railway system in India cutting travel times in half thereby giving a major boost to the economy of the country and hence reducing poverty. And all this while giving employment to at least 100,000 people.

$200 billion, then both railway and road systems can be revamped.

$300 billion: revamp roads, railways, and entire water supply system of the country.

$400 billion: all of the above + clean up and link all major rivers.

....

$1 trillion: revamp the entire physical infrastructure (roads, railways, ports, airports, electricity, river cleanup, forestation) of the country. After this you would think that you are living in a Dharmic heaven

You don't need gold from temples to do all this. In fact this could be misused as an excuse to not do all these as an optional behavior till gold from temples is looted.

After certain time of related wear & tear, the same people will turn to temples again as an excuse of not working. So this is not smart at all.

So what stopped the Govt. from doing all that is mentioned here? Govt. can build a dharmic heaven regardless of temple assets.

It is surprising that after profits, more gold to temple was not mentioned.

[Dhiman]

Gold at temples belong to deities. One can not see it just as a 'treasure' & 'monetize' it.

Gold is not wealth, it is an effective mechanism for exchanging one wealth with another across both time and geographical space. Gold's ability to serve as a monetary unit of exchange is pretty much the only reason why it has any value at all. So if you are telling me that gold should not be monetized, it pretty much defeats the entire value and purpose of gold of in the first place. Also, there is no god given rule that says Gold should not be monetized - if that was the case, no one would be interested in gold.

The real wealth lies in a well-built damn that will produce electricity for next 1000 years, or a road system that would allow for easy and effective transportation of wealth, or an irrigation system that would allow for food security. No amount of gold will help you if food crops fail, because food is wealth and gold is only a mechanism for exchanging wealth that exists. i.e, if wealth does not exist in the first place, all your gold is pretty much useless. If you have all the food, clothing, etc that you need, you would live a very good life even without having a single once of gold (because gold is not wealth).

The problem with hording Gold comes in when people start to confuse wealth (food, river damn, transportation system, irrigation system) with something that is only useful for exchanging wealth (i.e gold). When that happens, they start hording gold instead of real wealth.

Hindu deity to 'share the risk of the whole world( including barbarians across the world) in this internetworked era', but not make 'profits from the world' by making even more gold out of profits?

Given that gold is an effective mechanism for exchanging any wealth with any other wealth, you do want to have a reasonable amount of gold in your vaults, so that if needed I can quickly go out an buy different types of wealth: food, clean drinking water, a railway ticket to meet my parents, etc.

However, if I start hording gold, it can only mean two things: 1) either I am shit scared that the world as I know it is going to end soon or 2) I am confusing gold (mechanism for exchanging wealth) with wealth itself.

The reason for 'temple gold to be monetized' has inherent contradictions.

No, because if that was the case gold would not have been desired in the first place.

It is a one way street. One can not do so even in theory as all the profits from the 'monetizing' can not be back to the temple again in the form of Gold.

It is surprising that after profits, more gold to temple was not mentioned.

What the temple wants to do is to horde wealth, but not the unit for exchanging wealth (gold).

by the same policy. It is like giving excuses to take gold away from temple in some kind of sham schemes.

As far as I know, the only demonstrated large-scale use of gold horded in temples in India has been to finance conquest of India at the hand of foreign armies.

So what stopped the Govt. from doing all that is mentioned here? Govt. can build a dharmic heaven regardless of temple assets.

Other than the fact that GoI in post-independent india has generally been "poor" so to speak, mismanagement, corruption, and government officials coming to work only two out of 5 days are all problems that are inhibiting the economy. Hording of gold is part of this problem, not a part of solution.

[Suraj]

August exports up 44% at $24 billion

India's exports maintained sterling performance in August, growing year-on-year by 44.2% to $24.3 billion despite problems in major economies of the west.
...
Imports too grew by a fast pace of 41.8% to $38.4 billion, leaving a trade deficit of $14.1 billion for August.

For the cumulative period of April-August this fiscal, the shipments increased by 54.2% to $134.5 billion, while imports expanded by 40.4% to $189.4 billion.

Merchandise exports have been growing at an impressive speed in the current fiscal,shrugging off uncertainty in the US the debt problems in several European nations.

$135B exports during the first 5 months is good progress towards the $300B export target for the fiscal year.

[shyam]

Dhiman,

Could you please explain the exact type of monetization you are talking about? If you are talking about selling bonds with gold as collateral, temples do not need that money. If government needs that money, they effectively have to take over that gold from the temples.

If you think that taking money from temples is to help the people, why don't you try convincing people to donate money directly into a government fund instead of giving that to the temples? If people are not ready for that, government has no right to take the money they gave to the temples.

Why limit this monetization to temple gold? Why don't you suggest monetization of every citizen's assets (house, flat, land, gold, stocks etc.) and use that to fund infrastructure that people need? How many people will be ready for that?

[csaurabh]

Dhiman,

Could you please explain the exact type of monetization you are talking about? If you are talking about selling bonds with gold as collateral, temples do not need that money. If government needs that money, they effectively have to take over that gold from the temples.

No, what he is saying is that temples should spend their money ( gold ) instead of hoarding it.

Bit OT but...

Gold in Indian temples ended up financing all those Islamic armies that slaughtered their way through India. One can argue the moral aspect of it but I have often thought that if rulers had spent as much arming themselves militarily India would be much different place today. Hording wealth is not good for any economy unless it serves a purpose. Gold in private hands acts as an insurance policy, giving people confidence to spend and become consumers. Gold in Temples is not bad in itself as long as it is understood temple must serve the people. Several temples in my area, run feeding programs, orphanages, old women's homes, etc out of gold donated to deities. One temple recently built a new Gopuram out of temple gold. These are not bad things.

Basically, that.

[Dhiman]

Dhiman,

Could you please explain the exact type of monetization you are talking about? If you are talking about selling bonds with gold as collateral, temples do not need that money.

Anything, that would bring this money into the larger economy and hence more productive use.

If people are not ready for that, government has no right to take the money they gave to the temples.

Nowhere have I said that government should take over temples or forcefully make temples give up their gold horde. However, government does have the right to tax wealth (wealth tax) and redistribute wealth to those who need it (whether it does this effectively or not is another issue)

Why limit this monetization to temple gold?

Because gold is a non-productive asset.

Why don't you suggest monetization of every citizen's assets (house, flat, land, gold, stocks etc.)

House, flat, land, stocks, etc are productive assets that play a role in economy.

[shyam]

What about gold in private hands?

[Dhiman]

What about gold in private hands?

If we are talking about small amounts of gold that more or less constitute "savings", "retirement fund", or "rainy day fund", then no. If these private hands start hording gold, then apply high wealth tax as an incentive for private hands to invest this gold in economy.

[shyam]

It is estimated that 18000 Tons of gold in Indian private hands (some say 30000 Tons), more than that with GOTUS. Ask them to part with their gold for the welfare of the society. What do you expect people to say? Public welfare or private gold holding? If it is the former, suggest doing that before taking over temple gold. If it is the latter, then why should government take over temple gold that private individuals gave?

[Dhiman]

Dhiman, are you serious about levying taxes on individuals for buying gold AFTER you have already charged them taxes and service charges while buying the gold? Am not sure how you propose doing this. Could you elaborate?

As far as I know sir, gold (in private hands) is already subjected to a wealth tax, just like property tax one would pay for their house. Gold in temples (as far as I know) is not subjected to wealth tax.

[vishvak]

"Given that gold is an effective mechanism for exchanging any wealth with any other wealth, you do want to have a reasonable amount of gold in your vaults, so that if needed I can quickly go out an buy different types of wealth: food, clean drinking water, a railway ticket to meet my parents, etc.

However, if I start hording gold, it can only mean two things: 1) either I am shit scared that the world as I know it is going to end soon or 2) I am confusing gold (mechanism for exchanging wealth) with wealth itself."

First of all, gold in temples is not hoarded. It is offering to deities. The terms like hoarding do not apply to temple assets. This needs to be stamped on people's attitude now that we are in 2011. This nomenclature of barbarians, terming temple offerings to deities as wealth/hoarded/etc, that media spreads badly, must be discontinued.

if that was the case gold would not have been desired in the first place.

What the temple wants to do is to horde wealth, but not the unit for exchanging wealth (gold).

Desired by who? Those who pay taxes and offer gold to temples? How come anyone else pass value judgements on desires of those who donate gold to temple? Seems people who say this do not offer gold to temples is the only value judgement I can pass.

As far as I know, the only demonstrated large-scale use of gold horded in temples in India has been to finance conquest of India at the hand of foreign armies.

What is meant by 'use of gold in temples'? The gold belong to deities and anyone else can not pass value judgements on 'use of temple gold'.

Surprisingly, I have not heard one word against the barbaric invaders who want to have this excuse of looting gold and then run to take slaves, etc.

Other than the fact that GoI in post-independent india has generally been "poor" so to speak, mismanagement, corruption, and government officials coming to work only two out of 5 days are all problems that are inhibiting the economy.

That is the problem. So gold in the temples will not do anything to alter this. Real savings of wealth is to point out how this be corrected.

Anything, that would bring this money into the larger economy and hence more productive use.

This is not 'money'. By the way what is meant by productive use of these temple offerings and what stops this to occur as it is, without this looting of temples?

However, government does have the right to tax wealth (wealth tax) and redistribute wealth to those who need it

Offerings to temples are not 'wealth' of temples. No one would pay taxes and then want to see offerings to temples being taxed also. This is a shortcut to disaster as people will not like to pay taxes as it is.

It is incorrect to rationalize stealing of temple gold in any way, especially when yourself has said that gold is not wealth by itself. So again, what has Govt. got to do with gold of temples other than take it as an excuse to 'redistribute wealth'. Isn't Govt. already representative of people to be able to do this irrespective of looting temples?

Dhiman, are you serious about levying taxes on individuals for buying gold AFTER you have already charged them taxes and service charges while buying the gold? Am not sure how you propose doing this. Could you elaborate?

As far as I know sir, gold (in private hands) is already subjected to a wealth tax, just like property tax one would pay for their house. Gold in temples (as far as I know) is not subjected to wealth tax.

Gold is not something that temple demands. People offer. It has nothing to do with wealth of people which is already taxed. If after paying taxes the temple gold is still needed then the a lot of people are asses and unproductive. What has temple gold got to do with being unproductive? It is a shame that even in democracy gold of temples is called 'unproductive'.

[Dhiman]

Simple question is whether the assets of all charitable institutions/trusts are also taxed. If not, why only one kind of asset?

Because, as I have said many times earlier, gold is a non-productive asset.

[Dhiman]

How about land holdings that are not developed?

It can be developed, can't it?

[vishvak]

Simple question is whether the assets of all charitable institutions/trusts are also taxed. If not, why only one kind of asset?

Because, as I have said many times earlier, gold is a non-productive asset.

It is incorrect to point at temple asset because it is 'unproductive' in current environment.

It is correct to submit to deities, take their blessings as encouragement and be more productive from within, that will better the society.

My one paise onlee.

[nakul]

The money donated to temples is intended for the temple's use --- having free meals to the needy, donating towards relief causes, renovating, etc. Its not government property, period. If the government wants to raise money, they have the tax system. It has no business "managing" private funds. If the government really wants to improve the life of ordinary citizens, money should not be a problem.

[Neshant]

Most of the gold would be bought as jewellery, which seldom if ever gets sold. So, the point about deferred consumption is incorrect.

No you are incorrect.

If gold prices were to rise to a point where a piece of jewelry would buy an entire neighbourhood, do you think people would sell. Of course they would sell.

The reason they are not selling gold now is not because they don't ever want to sell it. Rather the psychological PRICE POINT for gold has not been hit in their mind that makes them want to part with their gold for other assets. i.e. gold is still considered undervalued relative to other assets in their minds.

As I said, gold is deferred consumption. It is savings of the best kind. When gold hits a certain price point (e.g. $10k/oz), people in India will exchange it for assets by the millions and India will even export that surplus gold that's been pent up. At the present price of gold, people are not willing to do so and in fact are still accumulating.

As for non-productive assets, that's what fiat money has become. Its a means of ripping off the productive and transferring the value of their labor & savings to the unproductive (i.e. the useless middleman industry called banking & financing).

[kumarn]

Most of the gold would be bought as jewellery, which seldom if ever gets sold. So, the point about deferred consumption is incorrect.

No you are incorrect.

If gold prices were to rise to a point where a piece of jewelry would buy an entire neighbourhood, do you think people would sell. Of course they would sell.

Are you married saar? Just curious