Tuesday, October 1, 2013

India government targets Temple Gold

THIRUVANANTHAPURAM, India (Reuters) - India's Hindu temples are resisting divulging their gold holdings - perhaps nearly half the amount held in Fort Knox - amid mistrust of the motives of authorities who are trying to cut a hefty import bill that is hurting the economy.

The central bank, which has already taken steps that have slowed to a trickle the incoming supplies that have exacerbated India's current account deficit, has sent letters to some of the country's richest temples asking for details of their gold.

Indian temples hold about 2,000 tonnes of gold worth $84bn (€62bn, £52bn) at current prices, according to the World Gold Council.

"The gold stored in temples was contributed by devotees over thousands of years and we will not allow anyone to usurp it," said V Mohanan, secretary of the Vishwa Hindu Parishad organisation in Indian state of Kerala, which is known for its rich temples.

Devotees offer gold to temples in the form of jewellery, bars, coins and statues of gods.
Indians buy as much as 2.3 tonnes of gold, on average, every day - the weight of a small elephant - and what they don't give to the gods is mostly hoarded. Jewellery is handed down as heirlooms and stored away with bars and coins as a hedge against inflation or a source of quick funds in an emergency.

That is costing the economy dear. Gold imports totalled $54 billion in the year ending March 31, 2013, the biggest non-essential item shipped in from overseas and a major factor in swelling the current account deficit to a record in 2012/13.
The Attukal Bhagavathy Temple trust is planning to reject the RBI request, according to the Times of India. M S Jyothish Kumar, secretary of the temple trust, told the newspaper that most of the committee members are against the RBI demand.

In July 2011, a Supreme Court committee assessed the value of the treasure found in secret vaults at the Sree Padmanabhaswamy temple in Thiruvananthapuram, the capital of Kerala. With the assessment yet to be completed, the treasure is estimated to be worth more than $20bn.