Launching of Gold Schemes on 5 November, 2015 is a great Pre Diwali Gift to all Indians by our Prime Minister Shri Narendra Modi. It’s ‘sone pe suhaga’ for our country. If India has 20000 tonnes of gold, worth Rs. 55 Lakhs Crores, why it should import gold and rely on other countries? Now no more reason for us to be called as poor.
Three Schemes were launched this Thursday by PM Modi. Huge piles of unused gold will be recycled and put to productive use for our economy. This will greatly help in reducing import of gold coins and bars.
Now we will go through these three schemes in detail:
GOLD MONETISATION SCHEME (GMS), 2015:
1. Investment Limit?
Minimum deposit limit prescribed is raw gold (coins, bars, jewellery) of 30 grams. No Maximum limit.
2. How to begin?
3. Interest Rate
Rate of Interest will be as follows:
|Time Period||Interest Rate (%)|
|1-3 years||Banks will decide|
4. Is premature withdrawal permitted?
Answer is yes but only after prescribed lock in period is over with penalty.
5. Will Gold Deposit Scheme, 1992 continue?
Till maturity the scheme can be continued or you can withdraw prematurely.
SOVEREIGN GOLD BONDS
The Union Finance Minister had announced in Union Budget 2015-16 about developing Sovereign Gold Bonds as a financial asset. These bonds will be issued by RBI on behalf of the Indian Government.
1. Investment Limit
Minimum prescribed limit is 2 grams of gold. Maximum limit is 500 grams per person for each Financial Year. Self declaration is to be submitted in this behalf.
2. Where to apply?
Applications may be submitted from November 5 – 20, 2015 to the banks and designated post offices. These bonds will be issued on November 26, 2015. Bonds will be restricted for sale to resident individuals, HUFs, trusts, universities and charitable institutions.
3. Tenure of Bond?
Tenure of bonds will be 8 years.
4. Exit Option?
Yes Exit is allowed but only after fifth year.
5. Interest Rate?
Interest rate will be 2.75% per annum payable semi annually on the initial investment.
6. How it works?
Gold Coins will be first national gold coins. National Emblem of Ashoka Chakra will be engraved on them.
Not only from households but huge volumes of gold are expected to come from temples and other trusts that have tonnes of gold lying idle. More productive use of gold will help in reducing our imports and recycling the metal.
Profile of Indians will be rebalanced from traditional gold purchase to productive investment. Interest rate should be too attractive if optimum success of the scheme is desired.
One point that PM Modi has stated in his speech is that you can use your gold bonds even on midnight if you have no liquid money in hand. Use these bonds as your collateral security in times of need. These bonds are also easily transferable. Even thieves will not try to even touch them. Gold bonds are your safest assets.
What for are you waiting for?????
(Author Details- CA Neha Gupta, B.Com, ACA, AIR (Final) 36, LNG & Associates, Chartered Accountants, Email: firstname.lastname@example.org)