Mumbai, February 17: In the Indian market, gold holds a high economic value. The country accounts for around a fifth of annual global gold demand. While until now policymakers could not use this in a positive way, World Gold Council predicts the newly panned budget of Arun Jaitley might bring a change to this.
The newly announced budget is packed with policies and schemes with an aim to boost agricultural sector in every aspect. He said that “Our emphasis is on generating higher incomes for farmers. We consider agriculture as an enterprise and want to help farmers produce more from the same land parcel at a lesser cost and simultaneously realize higher prices for their produce,” Finance Minister said unveiling the plans to double farmer’s income.
In the context of gold, focusing on rural economy is important as it accounts for two-thirds of India’s gold demand. The demand is naturally heavily linked to income levels. The council suggests 1% increase in farmer’s income will lead to 1% increased gold demand.
The reason explained behind the hopeful prediction is the announcement of an increase in minimum support price to 1.5 times the production cost of corps. Under a Ministry of Agriculture initiative, local existing mandis will be connected to a pan Indian trading platform. Hence connecting farmers all over India will definitely help them to achieve a higher income.