Corrupt may park money in gold

With the government making it tough to hold cash in high denomination notes, experts feel people may park their unaccounted money in gold and other assets — making their prices shoot up in the long run.

“These measures will not bring down corruption. Officials and politicians will continue to take bribes until they have power to make things worse for you. However, they make park this money in some other form,” said a head of an industry body on the condition of anonymity.

Gold and jewellery are considered to be the easiest way to hide unaccounted money as these could be passed on as traditional possessions. With the boom in real estate, a huge chunk of black money got transferred to land and property.

Globally, it was observed that when holding unaccounted money in cash was made difficult, corrupt officials would opt for taking bribes in kind, including gold. This may result in an incr-ease in gold prices in the medium run. While major real estate developers may not have big impact, property sales may dip in the short term as black money suddenly goes out of circulation. However, it may pick up later.