Gold menace :Govt.'s steps to curb gold import

Gold having a cultural value in India has become one of the greatest challenge to its balance sheet. Used mostly in jewellery,currently India imports almost 800-1000 tonnes of gold and have become the largest importer of gold. Earlier Govt. has introduced many measures like gold import duty but the move has resulted into smuggling of gold by illicit channels. Recently govt. has introduces slew of measures to curb this surging gold import.

                                                                            1)Sovereign gold bond scheme.

• This scheme is especially for retail investor ,wherein investor can invest in gold bond.
• Bond is issued by RBI on the behalf of GOI and it is restricted to Indian citizens including individuals, HUFs(Hindu undivided family),trusts, universities  and charitable institutions.
• Bond’s price is fixed on the basis of the previous week’s(Mon-Fri) simple average of the closing price of gold of 999 purity published by Indian Bullion and Jewellers Association.
• Minimum investment unit is 2 units(2 grams) and maximum is 500grams.
• Presently only banks and selected post-offices are allowed to distribute these bonds.

How it is beneficial for customer:

• Issue price(the price at which the gold bond will be issued) is quoted higher against the ruling market price.
• No dilemma of keeping gold at safe place.
• Facility of investment in paper form.
• Bond can be issued as collateral for loan.

How to make scheme more attractive: The present scenario of distribution(which is limited to banks and post-offices) should be extended to NBFCs, jewellers. So that investor could go to wherever he/she feels comfortable.

2)Gold Monetisation scheme:

• It would replace the earlier Gold Deposit and Gold Metal Scheme.
• Under this scheme customer brings their gold to specified agency or bank where its purity is determined and that quantity is deposited into customer’s metal account.
• Customers started to earn interest once he deposit the gold. The deposited gold is melted  and stored as form of bullion.
• Customer has to state their preference(either cash or bullion) of redemption at the initial stage(while opening account).
• The interest rate is decided by concerned banks and customer has option to invest even small amount like 30grams(so that it can even attract small investor).
• The scheme is intended to mobilise the gold stored in homes.

3)Indian Gold Coin:

• Indian Gold Coin is a part of Gold monetisation programme.  
• It will be the first ever national gold coin and will have the national emblem of Ashok Chakra engraved on one side and the face of Mahatma Gandhi on the other side.
• The coins will be available in denominations of 5 and 10 grams. The Indian Gold Coin is unique in many respects and will carry advanced anti-counterfeit features and tamper-proof packaging that will aid easy recycling.