CA Pooja Sagar
The shares of companies like Gitanjali Gems, Titan, Rajesh Exports surged up to 12% with the news of Cabinet giving nod to gold monetization scheme and sovereign bonds. The schemes will be launched soon. The rationale behind the introduction of these schemes is the prominent fact that the stock of gold lying idle in locker of Indian households is 20,000 tonnes and around 1000 tonnes of gold is imported every year.
In 2014-15, India imported nearly $35 billion worth of gold. The schemes aim at utilizing the idle assets of the country into some productive use. The government will bring the lying idle yellow metal into the banking system giving a boost to the Indian economy.
Gold monetization scheme has provided a great opportunity for the institutions like Tirupati Balaji temple to deposit its idle lying gold and earn interest on it. This scheme will operate on the basic fundamentals of fixed deposit scheme. The households and institutions have to open a “gold saving account” with the banks and deposit their gold. The salient features of the scheme are as follows:
Sovereign gold bonds will give investors an option to buy a paper instrument linked to gold prices rather than the gold physically. The features of the scheme:
With the advent of the schemes, the government will be able to reduce its gold import. Some are the key benefits of the scheme:
Government has high hopes about the scheme. The schemes will benefit millions of households and the economy as it they has the potential to translate gold savings into economic investment.
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