Understanding the government's attempt to transform attitudes towards a critical resource: Gold monetization in India

Abstract

We examine the Indian government's attempts to transform consumer attitudes towards a critical mineral asset in order to bring a part of 25,000 tonnes of privately held gold back into economic circulation through the Gold Monetization Policy of 2015. Using a multi-method approach, we explain how the policy potentially reduced consumer access to an important resource through a flawed attempt at changing deeply entrenched habits, combined with a set of network issues in policy implementation. A nation-wide survey of 1200 households validated observations on gold consumption. Expenditure data from national household survey highlighted the aggravating role of customs such as dowry. 14 interviews with banks and refiners clarified that banks would promote gold monetization when accompanied by additional process control and effective risk mitigation. We conclude that implementation of a minerals policy involving end consumers and a set of other stakeholders requires deep understanding of consumer attitudes and tailoring of the policy towards stakeholder incentives.