The legendary Indian obsession with purchasing gold has been passed down for generations. Families purchase gold on auspicious religious occasions and, in larger quantities, for weddings. It forms a significant part of savings, particularly in rural areas, and is passed down to future generations.
Today, however, it is also being credited as one of the main reasons for India’s spiralling current account deficit, which has widened to a record 6.7 per cent of GDP in the latest period. A country’s current account is the sum of its balance of trade — in other words, net revenue on exports minus payments for imports.
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