Over the past three weeks, the Indian rupee has been in the process of a historic collapse, and in a desperate move on Aug. 31 to acquire U.S. dollars to pay for necessary oil imports, the government is seeking ways to acquire thousands of tons of gold from its ancient shrines to stem off further drops in their devaluing currency.
With all efforts to arrest the rupee's slide coming to a naught, policymakers now plan to knock on the doors of temples ” from Tirupati to Shirdi” seeking a boon to feed Indians' fetish for gold without importing it.
The Reserve Bank of India, which has been making gold imports more difficult through a series of restrictions, is discussing with banks on how to convince temple trusts to deposit their hoard of idle jewelery that could be converted into bullion, said two bankers familiar with the matter. - Indian Times
This move by the Indian government, in cooperation with their central bank, comes on the heels of a similar program last week where bank administrators were tasked with offering devaluing Rupees to the public in exchange for their physical gold holdings.
Gold is an mainstay of Indian culture, being tied to nearly every ceremony, religious obligation, and personal anniversary going back thousands of years. It is estimated that Indian citizens hold and own over $950 billion worth of physical gold, which breaks down to approximately half an ounce of gold for every one of India's 1.3 billion member population. In a realistic scope however, 320 million people live in dire poverty in the Southeast Asian country, which leaves around 950 million citizens as probable holders of gold bullion and jewelry, with the average household owning about 30 ounces apiece.
Combined, the amount of gold held in shrines and by the people of India is well into the trillions of dollars, and is a ripe fruit that the central bank of India, and banks around the world, would love to access to save their own failing currencies and economies.
India is in an absolute desperate strait if they are looking towards changing thousands of years of traditio, by even suggesting the acquisition of gold held by families and holy shrines to save a fiat currency that has been in trouble well before 2013. However, the likelihood of forced confiscation is not very high at all, as this, more than any other threat to the people, would instantly cause a rebellion against the government which would assuredly tear down the entire fabric of India, as that fabric for thousands of years has been held together primarily with physical gold.