"Until recently the Indian government has allowed families to buy imported gold, having repealed the Gold Control Act in 1990. The lesson from this legislation was that it merely drove gold dealing onto the black market, and did nothing to stop individuals getting hold of gold if they wanted to.
However, the Indian government is not fully in favour of free markets and seeks to control many aspects of Indian life, including gold ownership. This is why the State and the financial sector (which is licensed by the State) are now encouraging ordinary people to buy Exchange Traded Funds and e-gold instead of physical bullion.
So what is the government’s real agenda? There are three possible considerations...."