National Post

Modi taps trillion-dollar temple gold hoard

- By Rama Lakshmi

MUMBAI • Workers for the centuries-old Shree Siddhivina­yak Temple here spent hours unpacking gold coins, heavy wedding necklaces and lustrous pendants from a closely guarded “strong room.” By the time gold-buyers began mingling with worshipper­s at the sweltering sanctuary on Tuesday, the jewelry auctioneer­s were ready.

“This is not a regular gold coin that you would buy from a gold shop — it contains the Lord’s blessing,” a temple board member said, holding up a tiny coin, probably left by a devotee years ago. It eventually sold for four times its face value.

Wealthy Hindu temples such as this one are repositori­es for much of the US$1 trillion worth of privately held gold in India. But little of it is contributi­ng to the Indian economy, and now Prime Minister Narendra Modi’s government is looking to monetize India’s vast hidden wealth.

In coming weeks, the government plans to begin a program that will allow temples to deposit their gold into banks to earn interest and circulate in the economy, rather than sit idle in musty vaults. The gold, officials said, would be melted down and sold to jewellers.

India is one of the largest consumers of gold in the world, importing almost 1,000 tons each year. The nation’s leaders have tried in vain to curb the nation’s insatiable appetite. But now the government hopes to coax temples into parting with some of their gold to address the country’s trade imbalance and protect its foreign exchange reserves.

In 2011, one temple in south India was found to have more than $22 billion in gold hidden away in locked rooms rumoured to be filled with snakes. Another has enough gold to rival the riches stashed at the Vatican, experts said.

Most of this temple gold is neither traded nor monetized, Finance Minister Arun Jaitley said in a budget speech in February. By contrast, the Indian government’s gold reserves amount to only about 550 tons.

“Our hunger for gold had led to a severe current account deficit a couple of years ago because gold was the No. 2 imported item after oil,” said Gnanasekar Thiagaraja­n, director of Mumbai-based commoditie­s consultanc­y Commtrendz. “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?” Thiagaraja­n asked. “Will gold offerings slow down in the future?”

Many traditiona­lists, including the boards of many of the country’s leading temples, prefer to have their gold locked up rather than circulatin­g in the economy.

“The jewelry belongs to God. Why should the government melt it?” asked Chandan Male, 42, a businessma­n and devotee at the Siddhivina­yak Temple. “By auctioning it, the jewelry is only circulatin­g among the devotees.”

Indians’ love of gold dates back centuries, stemming from gold-giving rituals and gold-buying festivals. Brides are draped with gold, and goldladen dowries are a traditiona­l gesture that costs a life savings for many poorer families.

During a dramatic court battle in 2011 over the riches in the 16th-century Sree Padmanabha­swamy Temple in the southern state of Kerala, a supreme court team discovered US$22 billion worth of gold.

This huge treasure trove — sacks of coins, diamonds and other jewelry, gem-encrusted ceremonial garb and solid gold idols lying in cavernous cellars — was revealed after the court ordered the vaults opened in response to a petition accusing temple officials of mismanagin­g the wealth.

Much of the gold had been deposited by the local royal family. A popular belief that the gold lay wrapped with dozens of venomous snakes undergroun­d kept robbers away. The image of a snake engraved on the wall fuelled the lore.

“The myth kept the gold safe for centuries,” said Ravi Varma Raja, 74, who was appointed by the royal family as the custodian of the vault keys until the court intervened.

“I am certain that 99 per cent of the people would not like it to be melted,” Raja added, reflecting how unlikely it will be for the temple to accept the government’s plan.

A few temples already have deposited small portions of their gold in banks. In the past four years, Tirumala Tirupati Devasthana­ms, one of India’s richest temples in the southern state of Andhra Pradesh, has deposited more than five tons in a state-run bank in a “gold for gold” program where the goods are melted down and held and the interest is paid back to the temple in gold.

“We receive interest not in cash but in gold. Had the devotees opposed, we would

I am certain that 99 per cent of the people would not like it to be melted

not be able to do this,” said O. Balaji, the financial adviser to the temple.

At the Siddhivina­yak Temple in Mumbai on Tuesday, thousands of worshipper­s waiting to pay homage to the elephant-headed god Ganesh stood in line in the heat watching curiously as the auction unfolded. There were bids on 352 gold items worth about US$130,000, and 179 gold jewelry items were finally sold at the auction, bringing in US$82,300 for the temple.

The wall and ceiling of the temple’s inner shrine are plated with pure gold, and the Ganesh idol is adorned with exquisite jewelry. Over the decades, devotees have made generous offerings when their special prayers were answered.

Reena Awasthi, 48, beamed, holding a gold necklace with Ganesh engravings that she bought for $1,250. She buys gold every year on this day from the shops. This year, her shopping turned out to be very special, she said.

“Somebody’s prayer was answered; some wish was granted and they gave this in gratitude to God. It has some sanctity and is more precious,” Awasthi said.

Although some worshipper­s expressed doubts about the government’s new plan, others were more pragmatic.

“If the temple gold goes to nation-building and strengthen­ing the economy, that is good karma, too,” said Aastha Desai, a 38-year old businessma­n.

 ?? RAVEENDRAN / AFP / Gett
y Images ?? Many traditiona­lists, including the boards of many of India’s leading temples, prefer to have their gold locked up rather than circulatin­g in the economy.
RAVEENDRAN / AFP / Gett y Images Many traditiona­lists, including the boards of many of India’s leading temples, prefer to have their gold locked up rather than circulatin­g in the economy.

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