The recommendation of the author in “Right time for RBI to sell gold” (Business Line, August 24) is a pretty ordinary reaction of a bystander. Imagine, if you say that your land has gained 500 per cent in value in the last five years, any ordinary person will ask you to sell it and make a profit. They can give you 100 ways of investing the profits. The author also has done that. He has made simple calculations of book profit and tried to show his intelligence in proposing how the profits can be used. He forgets to understand that once used to contribute to reduce fiscal deficit in any particular year, it will give relief to that year only, while the gold is gone permanently. The theory is also against our traditional, conventional Indian rationale that we don't buy gold to make profit but to provide stability. Gold in the Reserve Bank of India's coffers is better than dollars or any relief for fiscal deficit.
Altaf Rahman (BS)
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