India Could Have Achieved $5 Trillion GDP Target Earlier if Not for Gold Imports, Says Economic Advisory Council Member

India could have achieved Prime Minister Narendra Modi's dream of a $5 trillion GDP target long before if not for the habit of importing gold, a member of his economic advisory team said on Monday.

Indians Spent $500 Billion on Gold Imports in 21 Years

Mutual fund industry veteran Nilesh Shah, a part-time member of the Economic Advisory Council to the PM (EACPM), said that in the last 21 years, Indians have spent around $500 billion on gold imports alone. "We are working towards achieving the PM's $5 trillion GDP target. But by avoiding this just one habit, we would have become a $5 trillion economy long before. We have probably lost one-third of India's GDP by simply not following the right financial investment," the MD and chief executive of Kotak Asset Management Company said.

Indians Keep Reading About Customs Gold Seizures

Citing official data, Shah said Indians have spent $375 billion on gold imports on a net basis in the last 21 years and added that we keep reading about Customs gold seizures on a regular basis, which makes it evident that smuggling is rampant. Moreover, people come back with gold jewelry from destinations like Dubai and successfully walk out of the Green Channel at the port of landing, he noted.

Imagine What Would Have Been Our GDP if Invested in Entrepreneurs

Instead of investing in gold, if that money was invested in our golden entrepreneurs like the Tatas, Ambanis, Birlas, Wadia, and Adani, imagine what would have been our GDP? What would have been growth, what would have been our per capita GDP? he said.

India's gold imports have been a contentious issue for many years, with some arguing that they are a drain on the country's resources and others arguing that they are a necessary part of the economy. Shah's comments are likely to reignite the debate over gold imports and their impact on the economy.