Gods forbid: India's temples guard their gold from government
By D. Jose, ReutersTHIRUVANANTHAPURAM, India--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.
October 1, 2013, 12:09 am TWN
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.
It says the inquiries are simply data collection, but Hindu groups are up in arms.
“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 Hindu nationalist Vishwa Hindu Parishad organization in Kerala state, in a statement.
Indians buy as much as 2.3 tons 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 totaled US$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.
Guruvayur temple, in Kerala, one of the most sacred in India and boasting a 33.5-meter (110-ft) gold-plated flagstaff, has already told the Reserve Bank of India (RBI) it won't divulge any details.
“The gold we have is mostly offered by the devotees. They would not like the details to be shared with anybody,” said V M Gopala Menon, commissioner of the temple's administrative board.
The World Gold Council estimates there are about 2,000 tons of gold locked away in temples — worth about US$84 billion at current prices — which Indian devotees have offered in the form of jewellery, bars, coins and even replicas of body parts, in the hope of winning favors from the gods or in thanks for blessings received and health restored.
Curbing gold imports and getting the gold squirreled away back into circulation has become a priority for the government and RBI this year. Import duty is at a record 10 percent and the latest new rule — that 20 percent of all imports must leave the country as jewellery exports — caused confusion that dried up buying for two months.
The head of the Hindu nationalist main opposition Bharatiya Janata Party (BJP) in Kerala state, V Muralidharan, said the RBI wanted to “take possession” of the gold and maybe sell it for dollars.
The central bank said there was “no proposal under its consideration to convert idle gold into bullion at this juncture.”
But its letters, sent to leading temple trusts in Kerala, were prompted by a report looking at “issues related to gold imports” and loans outside the banking system in February, which zeroed in on temples and domestic hoards for fresh supplies.