India and its denizens since long have been having a torrid love affair with the gold metal and has shared an emotional and economical obsession with gold. For centuries, gold has been a symbol of opulence and is woven into the fabric of the Indian culture, traditions and religious beliefs. Gold has made its grand presence felt in most important events in the family be it marriages or any ceremonial celebration in a family. Some even consider gold as a subtle economic status at their ceremonial activities. Higher the quantity of gold’s presence, higher is the family’s status in the pecking order of the society. This unquenched thirst for acquiring gold has made India the world’s largest consumer of gold with nearly 30 % of the world consumption.
Over the last couple of years, Gold many have stabilized and has caught a range. However it has not deterred the mighty and rich to throng the jewellery shops and make a beeline for the auburn colour metal.
However the middle and the lower middle class has felt the pinch while buying gold as it has simply gone over their budgeted limits. Various companies like Tanishq, GRT Jewellers, Gitanjali, Tribhovandas Bhimji Zaveri Ltd and PCJ noticed this difficulty of Indians and came out with several jewellery schemes to entice this very segment. Schemes such as PCJ’s Gold Saving Scheme, Tanishq Golden Harvest Scheme, and so on have materialized in recent times. As per the schemes, the gold jewellery companies offered the buyers the option of paying for their jewellery in 12 monthly instalments out of which 11 would be paid by the customers and the 12th instalment would be borne by the company. At the end of the term, the amount accumulated would be used to buy the jewellery of the choice.
It is a wonderful opportunity for those who have been hit by the astronomic prices of gold and non-availability of lump sum disposable cash. They can systematically invest on monthly basis and reap the benefits at the end of the tenure. Another reason which has made gold investment a favoured mode of investment is the low bank deposit interest rates. The unprivileged layers of society prefer to keep their valuable assets in the form of jewellery so that it can be easily carried in times of distress situations and for this section of the society, gold jewellery schemes have definitely come as a boon.
While many might be thrilled at this option being available to them, it has some shortcomings as well. The customer might be short-changed on the purity and quality of gold and he cannot move to any other provider as his money is already with the company. One cannot buy gold bars or gold coins, which anyways is disallowed by RBI since last year, and are virtually forced to buy jewellery which has lesser resale value and would incur lots of making charges. Another factor to be noted is that the jewellery which is purchased at the end of the tenure would be offered at the prevalent market rates then and it might not be a wise option.
It is definitely true that these gold schemes have been the saviour for many families to realize their dreams. But do they really have a choice? Pertinent question, which may not have a definite answer.