Gold Loans in Crisis: The Modi Era Economic Strain

The Congress has highlighted a significant rise in gold loans, attributing it to what they term a 'Modi-made crisis' in India's economy. They cite RBI data indicating a 71.3% increase in gold loans, amidst declining credit across other sectors. Additionally, there is a notable impact on women's financial burdens.

On Tuesday, the Congress party raised concerns about the rise of gold loans in India, attributing it to economic mismanagement by the current government. The party claims that the Indian economy is facing a 'Modi-made crisis,' with gold loans surging 71.3% as per February's RBI data.

Jairam Ramesh, Congress general secretary pointed out that by 2024, persistent economic stagnation had resulted in a 300% growth in gold loans over five years, surpassing the Rs 1 lakh crore mark for the first time. With slowing credit in other sectors, distress lending like gold loans is reportedly increasing.

Ramesh criticized the Modi government's handling of economic issues, particularly affecting women. A report indicated that gold loans account for nearly 40% of all credit to women, with a 22% increase in women using their jewelry as collateral. The Congress argues that initiatives like the Sovereign Gold Bond Scheme have been ineffective amid broader economic challenges.

(With inputs from agencies.)