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Saturday, April 25, 2015

Wealth of the Gods

"Our hunger for gold had led to a severe current account deficit a couple of years ago because gold was the number two imported item after oil."
"Gold has consistently given good returns even as stock market and land prices have fallen, and has been the chosen mode of investing wealth among Indians."
"But if the temples start allowing the government to melt the gold jewelry donated by devotees, will it hurt their religious sentiments? Will gold offerings slow down in the future?"
Gnanasekar Thiagarajan, director, commodities consultancy Commtrenz, Mumbai

"The jewelry belongs to God. Why should the government melt it?"
"By auctioning it, the jewelry is only circulating among the devotees."
Chandan Male, 42, Siddhivinayak Temple devotee

"The myth [of serpents guarding the vault treasures] kept the gold safe for centuries."
"I am certain that 99 percent of the people would not like it to be melted."
Ravi Varma Raja,74, custodian of vault keys, Sree Padmanabhaswamy Temple
India eyes temple gold tofix trade deficit
The Sree Padmanabhaswamy temple in the Indian state of Kerala. Such temples have collected gold jewellery, bars and coins worth billions of dollars over the centuries. PHOTO: REUTERS 
The new government of India led by the hugely popular Prime Minister Narendra Modi, who has declared India open to the world for business and investment, is trying to crack yet another financial nut of tradition and heritage that locks monumental tons of gold and jewellery in temple vaults, dedicated to the worship of Hindu gods, the gold and jewellery given as gifts in veneration of those gods, becoming the sole property of each temple.

Now the Government of India sees that treasure as a means to grow the Indian economy, to take it out of the vaults, with the permission of the temples, and either melt it down or sell the items. As one of the largest gold consumers in the world, importing about a thousand tons each year, the government hopes that if it can coax temples to relax their grip on the gifted gold so the country's trade imbalance could be addressed.

One temple alone in south India was discovered to have in its possession over $22-billion in gold locked away in rooms that rumour had it were guarded by venomous snakes. On its inner walls snakes are engraved, as a warning to any who might consider theft. Another temple has more gold than the riches owned by the Vatican, the pride of an urban legend would have it.

Finance Minister Arun Jaitley pointed out in a February budget speech that the potential of that gold neither monetized nor traded, could comprise far more potential advantage to the country than the government's own gold reserves of a much lesser amount. It's a hard sell to the traditionalists who make up the boards of the leading temples who prefer their gold to remain where it is.

The 16th Century Sree Padmanabhaswamy Temple located in the southern state of Kerala's huge treasury includes sacks of gold coins, diamonds and jewellery, along with gem-encrusted ceremonial clothing and solid gold idols resting in huge cellars. A petition filed with the courts accusing temple officials of mismanaging the temple's wealth in 2011 led to the discovery that the temple's treasure was valued at $22-billion.

That wealth was traced to the local royal family having deposited it in the temple as a gift to the gods. Some temples have deposited small portions of their gold in banks. One of India's richest temples in the southern state of Andhra Pradesh, Tirumala Tirupati Devasthanams, deposited over five tons in a state-operated bank in response to a "gold for gold" program where the gold is melted down and held and the interest paid back to the temple in gold.

At the Siddhivinayak Temple in Mumbai, an auction took place when 352 gold items with a collective value of $130,000 items were put on display, inviting bids from worshippers. The temple earned $82,300 when 179 pieces of gold jewelry were sold at the auction. Within the temple the wall and ceiling of its inner shrine are plated in pure gold. The Ganesh idol standing there is adorned with exquisitely priceless jewelery.
Donated gold jewelry was put up for auction this week at a Hindu temple in Mumbai, India. Credit Kuni Takahashi for The New York Times

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