South India's favourite colour - Gold!

Last Updated: Wed, Jul 18, 2012 10:33 hrs

​Last June, the opening of the secret vaults of the Padmanabhaswamy Temple in Thiruvananthapuram , unearthed treasures  estimated  at over a trillion rupees.  This year, the riches of the Pandya dynasty are under the spotlight.  As an outlier, this one is huge, specially after the government pleader's statement in court this Monday that the Tamil Nadu government would be seeking the help of Interpol (International Criminal Police organisation) in unravelling the mystery.

Gold, intrigue and family feud are an irresistible combo, especially in the south, which is not only a huge consumer of television soap operas, but is also a big time consumer of gold and gold jewellery.

 On Monday, a number of spectators turned up in the Madras High Court to watch the cross examination in what has come to be known as the 'Pandya riches in Swiss vaults' case.

It is a case where descendants of the Sivagiri estate (dating back to the Pandya kingdom) are claiming that their hereditary wealth is locked away in Swiss bank vaults. The case has been in court for a while now. The two division bench of Justices P Jyothimani and M Duraisswamy of the Madras High Court may have been surprised at the avid  interest in such a case,  but historians say this is a case that touches a chord in millions of Tamilians.

"Historically, the Pandyas were renowned as much for their valour as for their wealth, and they have bequeathed a wealth of art and culture to the land." says K Venkatraman, history professor, University of Madras. History books say that the power of the Pandyas, who ruled over a huge swathe of land in southern India with Madurai as their capital for centuries, began waning around the 16th century.  

However, they continue to wield a strong influence in modern times. In fact, the state's two dominant political parties, DMK and AIADMK, have had a slugfest over the location of the statue of Kannagi, a woman who symbolises freedom and justice. Legend has it that centuries ago Kannagi burnt down the Pandya capital city Madurai after her husband, a commoner, was falsely convicted of stealing a royal anklet. She proved that her husband only possessed her gem studded anklet and not the royal queen's, which was crafted with pearls.

Clearly, the king and the aam admi had good taste in jewels in ancient times, and that tradition continues even today, say historians. Literature, travelogues and oral tradition dating back to the Sangam period are full of references to riches, and Tamilians always had an eye for investing wisely, say historians. "Even allowing for some exaggeration (thanks to poetic license), the fundamentals are not off the mark," says Madras University Professor S Kuppusamy. "The invaders came to plunder the abundant wealth of the south," adds another historian. The region has been ruled for centuries by Cholas, Cheras, Pandyas, Pallavas, the Nayaks and the Marathas, "but the tradition of investing in wealth was common to all sections of society and this has been the case  right up to modern times, " he says.  

According to some estimates, Indian households possess some 18,000 tonnes of gold. In the last fiscal, India imported around $ 45 billion worth of gold, and south has a major share in consumption of this yellow metal.  Import of gold coins by banks, for retail sales to homes, grew from just 1 % in 2009 to over 3 % in the last fiscal, showing a growing demand for gold as an investment option, even though gold prices have been rising steadily. Last year saw domestic consumers opt for gold as a bankable investment against rising inflation. Last year in particular was a good one for those who rushed to invest in gold, although this year, the rush slowed to a walk,  immediately after the union budget this year ,  announcing an increase in the customs duty on refined gold from 2 % to 4 % .  The poor performance of the rupee to the dollar has also made the yellow metal more expensive than prevailing international rates on quite a few occasions.

Customers say they are waiting and watching. Meanwhile, the Reserve Bank of India is trying to come up with alternate investment options, with high yield. Recently, media carried reports of the RBI's deputy governor Anand Sinha talking of an alternate instrument that can bring a satisfactory yield. "We are considering instruments which can mimic the returns on gold," he had said.

Investors, especially those down south are waiting to join the next rush.

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