6:03 am - Friday December 13, 2024

Gold Monetisation Scheme Should Be Investor Friendly: Gitanjali Exports

1876 Viewed Gautam Comments Off on Gold Monetisation Scheme Should Be Investor Friendly: Gitanjali Exports

After the announcement of a gold monetisation scheme in the Budget, the details of the scheme are keenly awaited. The scheme has the potential to attract Rs. 1 lakh crore worth of gold deposits, says Sanjeev Agarwal, CEO of Gitanjali Exports Corporation. (Watch video)

In Budget 2015-16, Finance Minister Arun Jaitley said a gold monetisation scheme will be introduced to allow depositors of gold to earn interest. Banks and other agencies can also monetise this gold. The scheme is aimed at tapping the precious metal for productive purposes as well as to bring down India’s gold imports.

But the operational aspect of the gold monetisation scheme needs to be investor friendly to become successful, says Mr Agarwal, who is also a member of industry body FICCI’s Gems & Jewellery group. “Not too many questions should be raised when the person deposits gold into the scheme. If bars and coins are also accepted under the gold monetisation scheme and no questions are raised about source of these bars and coins – it could be gift at wedding or inherited by the family over generations and the source of that is not possible – at least 200-300 tonnes can come under the gold monetisation scheme,” he says.

World Gold Council estimates that Indian households own 22,000 tonnes of gold with at least 20-30 per cent of it in form of bars and coins, Mr Agarwal says.

The jewellery manufacturing sector can utilize the 200 tonnes of gold under the scheme and this could bring down India’s gold imports significantly, he added. India imports about 800-1000 tonnes of gold each year.

Brokerage firm Nomura in a note also raised questions about the implementation aspects of the gold scheme. “The gold monetisation measures announced by the India Budget on 28 February 2015 are a step closer in the right direction to improve India’s overall economy and Turkey is an example of successful gold monetisation. However, we are concerned by the implementation uncertainties.”

Mr Agarwal also said that the gold monetisation scheme should be open for a longer period to make it a success. This will incentivise financial intermediaries and jewellers to make more customers look at the scheme more carefully, he added.

The earlier gold monetisation scheme announced in 1998 and was open for only 3 months, leading to mobilsation of just 41 tonnes, Mr Agarwal added.

Don't miss the stories followIndiaVision India News & Information and let's be smart!
Loading...
0/5 - 0
You need login to vote.

Gold, silver rebound on marriage season demand, global cues

Gold near three-month low

Related posts