indians love gold. Not as an investment, not as a trade — but as jewellery. Nearly 70% of India’s total gold stockpile sits locked up in bangles, chains, necklaces, and wedding sets. On the surface, it looks like wealth. But in reality, it’s a massive economic deadweight.
Unlike stocks, gold jewellery doesn’t trade. people only sell it out of desperation — not for profit, not for growth. Which means no capital gains tax, no Securities Transaction Tax (STT), and no liquidity for the economy.
And here’s the kicker: gold has outperformed the NIFTY-50 in the last five years. With prices soaring, fresh investors who entered stocks post-2020 are asking the dangerous question: “Why bother with stocks at all?”
If India’s stock markets don’t wake up soon, an entire generation of investors will turn into gold hoarders. And that’s a crisis nobody is talking about.
1. 70% of India’s gold = Dead Capital
When gold sits as jewellery, it doesn’t circulate. It doesn’t earn. It doesn’t grow. It just sits — a shiny but economically useless lump.
2. No Trading, No Taxes, No Gain for the State
Stocks generate capital gains tax, STT, and turnover for the economy. Jewellery generates none of that. Every rupee that moves from stocks to jewellery is a net revenue loss for the government.
3. From Liquid to Illiquid: The Big Shift
Stocks are liquid. gold jewellery is not. Once money is locked into jewellery, it doesn’t move unless there’s a financial emergency. It’s like parking your cash in a time capsule with no economic multiplier.
4. Gold Is Beating NIFTY — And That’s Dangerous
In the last five years, gold has quietly outperformed the NIFTY-50. The message to new investors? Stocks are risky, gold is safe. If this perception hardens, india risks reversing all the post-2020 retail investor momentum.
5. The Cultural Trap: Weddings Over Wealth
Unlike in the West, where gold is seen as an investment hedge, in india, it’s still emotional jewellery. Families happily drain their liquid savings into wedding ornaments. It looks like prosperity — but it’s actually a slow bleed.
6. Capital Outflow from Stocks = Weak Markets
The more people pull out of stocks and pour into gold, the weaker indian markets get. Less liquidity, less confidence, less retail participation. It’s a vicious cycle that kills growth.
7. The Coming Generation of gold Bugs
Post-2020, millions of new indians entered stock markets for the first time. If markets stagnate while gold keeps climbing, these first-time investors will exit equities — and become permanent gold bugs. Once that shift happens, it’s almost impossible to reverse.
Closing Punch
India’s obsession with gold jewellery isn’t just a cultural quirk. It’s an economic liability. It’s draining money out of productive assets, starving the stock market, and weakening government revenues.
If NIFTY doesn’t deliver soon, India’s investor class may shrink back into the comfort of bangles and chains. And that would be a tragedy — because no economy in history has grown rich by hoarding gold in wedding lockers.
India’s biggest stock market rival isn’t foreign capital. It isn’t inflation. It’s sitting right there — in your mother’s jewellery box.
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