PM MODI’S SELF RELIANCE PUSH

• Prime Minister Narendra Modi appealed to citizens to support the country during the global crisis caused by tensions in West Asia.
• The Prime Minister made this appeal while addressing a public meeting in Hyderabad on May 10, 2026.
• He emphasized the need to conserve Foreign Exchange Reserves (Forex Reserves) and reduce dependence on imports.
• The appeal came at a time when rising crude oil prices and high gold imports were increasing pressure on India’s economy.
• India’s gold imports reached nearly $72 billion in FY 2025–26, contributing to a widening trade deficit.

• India’s foreign exchange reserves were reported to be above $690 billion, but concerns remain regarding pressure from oil and gold imports.
• The Prime Minister linked the appeal with the vision of Atma Nirbhar Bharat or Self-Reliant India.

1991 V/S 2026

MAJOR APPEALS MADE BY THE PM

• The Prime Minister urged citizens to reduce the use of petrol and diesel in daily life.
• He advised people to use metro services wherever available.
• He encouraged the use of public transport and carpooling to reduce fuel consumption.
• He promoted the use of Electric Vehicles (EVs) to reduce dependence on imported crude oil.
• He suggested that goods should be transported more through railways rather than roadways.
• He stated that reducing fuel consumption would help India conserve foreign exchange reserves.

• The Prime Minister asked citizens and organizations to revive Work From Home (WFH) arrangements and virtual meetings.
• He stated that India had successfully adapted to digital working methods during the Covid-19 pandemic.
• He encouraged the use of video conferencing and remote work to reduce travel expenses and fuel consumption.
• He described these practices as the “need of the hour” during the present global crisis.

• The Prime Minister appealed to citizens to postpone unnecessary foreign travel for at least one year.
• He specifically mentioned foreign vacations, destination weddings, and luxury overseas travel.
• He stated that increasing foreign travel among the middle class was causing a large outflow of foreign exchange.
• He urged citizens to prioritize national interest over non-essential spending abroad.

• The Prime Minister urged people to avoid purchasing gold during festivals and weddings for at least one year.
• He stated that reducing gold imports would help conserve foreign exchange reserves.
• India is one of the world’s largest importers of gold, and heavy imports increase pressure on the trade deficit.
• The Prime Minister presented the appeal as a voluntary and patriotic contribution toward economic stability.
• The article noted that jewellery stocks declined after the Prime Minister’s appeal, as investors anticipated moderation in gold demand.

• The Prime Minister encouraged citizens to identify imported goods used in daily life and gradually shift toward Indian-made products.
• He clarified that people should not immediately discard foreign products.
• He stated that the long-term goal should be to strengthen domestic manufacturing and self-reliance.
• He connected this appeal with the “Vocal for Local” campaign that had earlier been promoted during the Covid-19 pandemic.

• The Prime Minister appealed to families to reduce cooking oil consumption by 10%.
• He stated that lower edible oil consumption would improve family health.
• He also noted that India imports large quantities of edible oil, and reducing consumption would lower import dependence.

• The Prime Minister appealed to farmers to reduce dependence on chemical fertilizers.
• He promoted natural farming practices to improve agricultural self-reliance.
• He stated that natural farming would reduce import dependence and support sustainable agriculture.

HISTORICAL CONTEXT OF GOLD CONTROL POLICIES

United States Gold Policy, 1933 :

• During the Great Depression, US President Franklin D. Roosevelt issued Executive Order 6102 in 1933.
• The order restricted private ownership of gold in the United States.
• Americans largely complied due to patriotism and fear of legal penalties.
• The policy helped strengthen US gold reserves and the financial position of the United States.

INDIA’S GOLD CONTROL ACT,1968

• In 1968, Finance Minister Morarji Desai introduced the Gold Control Act.
• The law was introduced after economic difficulties caused by the 1962 India-China War and the 1965 India-Pakistan War.
• The Act banned private ownership of gold bars and coins.
• Citizens were required to convert gold into jewellery and declare their holdings.
• The government expected citizens to cooperate in the national interest.
• However, demand for gold remained very high despite the restrictions.
• The policy led to increased gold smuggling, expansion of hawala networks, and growth of the black economy.
• Illegal trade and tax evasion increased significantly during this period.
• The Gold Control Act was eventually repealed in 1990.

DIFFERENCE BETWEEN 1968 POLICY & 2026 APPEAL

• The Gold Control Act of 1968 imposed compulsory legal restrictions, whereas the 2026 appeal is voluntary.
• The current government has not imposed any legal ban on gold ownership or purchases.
• Modern India has financial alternatives such as Gold ETFs, Sovereign Gold Bonds (SGBs), and digital gold investments.
• The present approach focuses on patriotism, awareness, and self-discipline rather than coercion.

MODERN ALTERNATIVES TO PHYSICAL GOLD

• Sovereign Gold Bonds (SGBs) are government securities denominated in grams of gold.
• The SGB Scheme was launched by the Government of India on 30 October 2015.
• SGBs were issued by the Reserve Bank of India (RBI) on behalf of the Governmentof India (GOI).
• SGBs acted as a substitute for holding physical gold, allowing investors to invest in gold without storing it physically.

• As of May 2026, the Sovereign Gold Bond (SGB) scheme is no longer open for new subscriptions.
• The Government of India has discontinued issuing new tranches of SGBs.
• However, existing SGBs remain valid until maturity.
• Existing bonds continue to trade on stock exchanges (NSE/BSE).
• Investors cannot purchase new SGBs directly from the RBI
• Investors can still buy SGB units from existing holders in the secondary market (NSE/BSE).

• Gold Exchange Traded Funds (ETFs) allow investors to invest in gold digitally.
• Gold ETFs reduce storage risks associated with physical gold.

• Digital gold allows people to purchase and store gold online in small quantities.
• Digital platforms provide easy access to gold investment without physical handling.

WHY GOLD DEMAND REMAINS STRONG IN INDIA?

• Gold is considered a symbol of wealth, security, and prosperity in Indian society.
• Gold plays an important role in weddings, festivals, and religious traditions.
• Many households consider physical gold a safe investment during inflation and economic uncertainty.
• Rural and semi-urban families often trust physical assets more than financial instruments.

ECONOMIC IMPORTANCE OF THE APPEAL

• Reduced gold and fuel imports can help lower India’s trade deficit.
• Lower imports can reduce pressure on foreign exchange reserves.
• Reduced import dependence can help stabilize the Indian Rupee.
• More domestic savings may flow into productive investments such as manufacturing and infrastructure.
• Increased investment can support economic growth and job creation.

CHALLENGES ASSOCIATED WITH THE SCHEME

• Gold buying is deeply linked with Indian cultural traditions and social customs.
• Weddings and festivals are major periods of gold consumption in India.
• Therefore, changing public behavior regarding gold purchases may be difficult.

• Historical experience shows that excessive restrictions on gold can increase smuggling activities.
• Illegal trade and black market networks may expand if harsh controls are introduced.
• Therefore, voluntary cooperation is considered more effective than strict legal enforcement.