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New Delhi, Jun 22 () State Bank of India (SBI) has mobilised 13,212 kg of household and institutional gold through the Gold Monetisation Scheme (GMS), according to the state-owned bank's annual report. It added that the country's largest lender collected as much as 3,973 kg of gold during 2019-20 under the GMS, a programme launched by the government to utilise gold lying idle with individuals as well as trusts. "During FY2020, (the) bank mobilised gold amounting to 3,973 kgs, bringing the cumulative mobilisation to 13,212 kgs," said SBI in the report. The government launched the GMS in November 2015 to mobilise idle gold held by households and institutions. The objective of the scheme was to facilitate use of idle gold for productive purposes, and also reduce the country's dependence on imports. The bank further said that during 2019-20, it mobilised 647 kg (Rs 243.91 crore) through sovereign gold bonds (SGB), thus taking the total gold mobilised since inception of the scheme to 5,098 kg (Rs 1,561 crore). The SGB scheme was introduced by the government during 2015-16 to promote digital gold instead of physical gold for investment purposes. As a primary player in the field of bullion banking, the bank has been making available metal gold loan to jewellers engaged in manufacturing of gold ornaments for the domestic and export purposes. During 2019-20, the bank extended metal gold loan to jewellers to the extent of 22,255 kg and sold 2,522 kg of gold under the 'Sale of Gold' scheme to jewellers and traders. NKD CS HRS

SBI mobilises 13,212 kg gold through Gold Monetisation Scheme

New Delhi, Dec 18 () Union Minister Piyush Goyal on Wednesday sought suggestions from the jewellery industry to improve the Gold Monetisation Scheme to unlock the large pool of the yellow metal lying idle with households.
 Addressing an awards function organised by the Gems and Jewellery Export Promotion Council here, commerce minister said unlocking of idle gold will help in reducing the burden on foreign exchange reserves.
In 2015, the government had launched the Gold Monetisation Scheme to mobilise the yellow metal held by households and institutions in the country.
 However, the scheme has failed to evoke good response from individuals because of lower returns and security concerns.
 Under the scheme, banks' customers are allowed to deposit their idle gold for a fixed period in return for interest in the range of 2.25-2.50 per cent.
 "I think there are large amount of gold that is lying in people's lockers without any use. It is an unproductive asset which neither gives the person any return nor helps the economy. I would like you all to help us create a scheme by which we can truly attract people to come and deposit their gold," Goyal said.
 The aim should be to encourage people to deposit their idle gold and earn income from it without losing ownership of the yellow metal. They should keep gold like a fixed deposit and enjoy both appreciation of the gold value and some reasonable return on the deposit, he said.
 The minister asked the industry to share lacunaes in the existing scheme and suggest ways to improve it, he added.
 Stating that unlocking idle gold under the scheme will reduce burden on the foreign exchanges reserves, the minister said India continues to import large quantities of the yellow metal and unlocking idle gold will reduce the import dependence.
 India's annual gold demand is 800-1,000 tonnes and much of it is imported. It is estimated that about 20,000 tonnes of gold is lying idle with households.
 On banks' lending to gems and jewellery sector, Goyal said his ministry will soon approach the Union Cabinet seeking approval for the NIRVIK scheme (Niryat Rin Vikas Yojana) under which the government proposes to subsidise the premium that has to be paid by the large gems and jewellery exporters.
 On the industry's concerns about special economic zones (SEZs), Goyal said the issues will be addressed with the finance ministry soon.
 "We are trying to see if they can sort out the utilisation of unused areas. I believe many SEZs either have built up area or even plots of land which are unused and with the sunset clause coming in on March 31, 2020 there could be a situation where unused infrastructure may not be able to really attract SEZ units to come in and operate out of these areas.
 "In such a situation I would like you all also to study and guide us what kind of a formula or format can be created so that such unused areas can be used by the domestic industry," he added.
 The minister also mentioned that setting up of jewellery parks could be looked at.
 He also urged the gems and jewellery industry to look at establishment of more skilling centres to create better trained manpower for the sector. RSN LUX CS RSN LUX CS
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Govt seeks industry suggestions to improve Gold Monetisation Scheme

The <keyword id="54778" type="PERSON" weightage="20" keywordseo="Somnath-Temple">Somnath Temple</keyword> Trust is going to invest gold, which is not in everyday use, in the <keyword id="2746707" type="UNKNOWN" weightage="20" keywordseo="Gold-Monetisation-Scheme">Gold Monetisation Scheme</keyword>. 
 
With this move, Somnath Temple will become the first one to do so in Gujarat. 
 After conducting meeting with Prime Minister <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword>, who is also one of the seven trustees of the temple, Trust Secretary and trustee P K Lahiri said that the trust has nearly 35 kg of gold, which is either in the form of pure gold or ornaments. 
 
"We don't have a huge amount of gold. Majority of the gold is used for decoration on day-to-day basis in the temple. Thus out of that 35 kg of gold, we will separate pure gold which can be deposited under the scheme," said Lahiri. 
 
Apart from Somnath Temple, other temple-Dwarkadhish Temple and Ambaji Temple-haven’t shown interest in the scheme. 
 
(Image: Indiatimes)

Somnath Temple to invest around 35 kg idle gold in Gold Monetisation Scheme

As a result of the initial lukewarm response to <keyword id="30067" type="ORGANIZATION" weightage="100" keywordseo="RBI">RBI</keyword>’s <keyword id="2746707" type="UNKNOWN" weightage="100" keywordseo="Gold-Monetisation-Scheme">Gold Monetisation scheme</keyword>, RBI Governor <keyword id="6358908" type="PERSON" weightage="100" keywordseo="Raghuram-Rajan">Raghuram Rajan</keyword> echoed the need for some fine tuning. 
 
Till November 18, the gold monetisation scheme had garnered 400 grams of physical gold. The country has over 20,000 tonnes worth over Rs 52 lakh crore of idle gold with households and institutions. 
 Gems and jewellery industry representatives last week met Economic Affairs Secretary <keyword id="6359111" type="PERSON" weightage="100" keywordseo="Shaktikanta-Das">Shaktikanta Das</keyword> and discussed ways to make the scheme attractive. 
 
The industry associations urged the government to allow BIS certified jewellers to act as collection agent for gold monetisation scheme and the Finance Ministry had given an in-principle nod to the suggestion. 
 
At present, there are 3.5 lakh jewellers in the country, of which 13,000 are BIS-certified. 
 
With regard to Sovereign gold bond, the Governor said "response to the scheme has been good and encouraging". 
 As many as 63,000 application totalling Rs 246 crore has been received under the first tranche of <keyword id="1427049" type="UNKNOWN" weightage="100" keywordseo="gold-bond-scheme">Gold Bond scheme</keyword> which closed on November 20. The allotment of bonds will happen on November 30. 
 
"This is an excellent response for an innovative product," Shaktikanta Das tweeted today. 
 
(Image credits: BCCL)

RBI decides to fine tune gold monetisation scheme after lukewarm response

In a bid to reduce the demand for gold in the country, <a href="http://www.businessinsider.in/Narendra-Modi-just-launched-a-Rs-1000cr-fund-thatslike-a-dream-come-true-for-all-engineers-and-innovators/articleshow/49669244.cms">Prime Minister Narendra Modi</a> has launched three new schemes--- Gold Monetisation Scheme(GMS), Sovereign Gold Bond Scheme and Gold Coin and Bullion Scheme. 
	 While under GMS depositors will get 2.5% interest, under the Sovereign Gold Bond Scheme, people will earn 2.75% interest on depositing their gold. Besides these schemes, <keyword id="2238662" type="UNKNOWN" weightage="20" keywordseo="PM-Modi">PM Modi</keyword> also launched gold coin and bullion which bears the national emblem Ashok Chakra and Mahatma Gandhi on either sides of the coin. The coins will be available in denominations of 5 and 10 grams. 
	 
	Encouraging people to deposit their gold under these schemes, PM Modi said, “People should take advantage of the golden opportunity to help India march to a golden period.” 
	 
	While announcing these schemes, PM Modi noted that <a href="http://www.businessinsider.in/50-new-airports-coming-up-in-India-in-thenext-10-yrs/articleshow/49673619.cms">India</a> has been the largest buyer of gold followed by China and has also purchased 562 tonnes of the metal as against China's 548 tonnes. 
	 
	Taking a pun at <a href="http://www.businessinsider.in/Heres-how-RBIs-Raghuram-Rajan-managed-to-save-the-economy-with-his-50-basis-point-cut/articleshow/49152582.cms">RBI governor Raghuram Rajan</a>, PM Modi noted that India’s tradition can boast of savings and empowering women with gold. He added that even the <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword> governor Rajan will have to understand the difference between arthashastra (economics) and grahshastra (home economics). 
	 
	It should be noted that at present India imports around 1,000 tonnes of gold every year, thus putting immense pressure on the country’s forex reserves. PM Modi explained that these schemes could bring down the country’s dependence on the international market for gold, thus reducing the import bill substantially.

Narendra Modi’s ‘Golden’ gift to India on Diwali

In order to attract masses to invest in gold, the Indian government announced various gold investment and savings schemes, like the Gold Monetisation Scheme. However, these schemes got a lukewarm response by people due to lack of awareness, says a recent study by researchers of Institute for Financial Management and Research (<keyword id="218689" type="ORGANIZATION" weightage="100" keywordseo="IFMR">IFMR</keyword>), funded by India Gold Policy Centre (IGPC) of the Indian Institute of Management Ahmedabad (<keyword id="42512" type="COMPANY" weightage="100" keywordseo="IIM-A">IIM-A</keyword>). For the study, researchers covered 1000 respondents across four districts, namely Kolhapur in Maharashtra, Coimbatore in Tamil Nadu, Hooghly in West Bengal and Saharanpur in Uttar Pradesh. As per the results, out of total 1000 respondents, only five persons were aware about government's <keyword id="2212607" type="UNKNOWN" weightage="100" keywordseo="gold-schemes">gold schemes</keyword>, such as Gold Monetisation Scheme, Sovereign Gold Bond Scheme and Gold Coin Scheme. "We found that people had little or no awareness about these three gold schemes, which were introduced two years back by the Centre. Out of 1000 respondents in four districts, only five knew about these schemes," said Misha Sharma, one of the researchers from IFMR. Experts are of the opinion that the government should start marketing the schemes so that people can be made aware. "Around 15,000 tonnes of gold, in the form of jewellery is lying idle with citizens across the country. The study had revealed that people are willing to invest in these schemes if they got adequate information about them. It shows that there is indeed a potential," said IGPC Head Prof. Arvind Sahay. "Apart from beefing up marketing efforts, banks should also be motivated to promote gold loan, so that they go out and convince people to opt for such loans. We don't see such motivation by banks at present," he added. (Image source Good Moneying)

Government's gold schemes are not attracting masses, says IGPC IIM-A study

It was being billed as a big bang budget but there is almost nothing to suggest that. On the contrary, it is a workmanlike full year budget for Finance Minister <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> with the focus directed more towards <keyword id="17408" type="PERSON" weightage="20" keywordseo="infrastructure">infrastructure</keyword> so that the investment cycle can be revived. 
	 The Finance Minister has given in to the demand of the industry and proposed reduction in <keyword id="118200" type="UNKNOWN" weightage="20" keywordseo="corporate-tax">corporate tax</keyword> to 25 per cent from 30 per cent earlier. This should boost the investment cycle over the next 12-18 months, which could help revive the job market, a promise made during the election campaign. The finances of the government could be helped by a Rs. 69,500 crore disinvestment target for the next fiscal. 
	 
	While the sharp cut in corporate tax may look good, the proposal to create an enabling environment for business and GAAR being deferred has certainly added to the comfort for business leaders. 
	 
	The stringent penal provisions for black money is certain to set the cat among the pigeons. 10 year rigorous imprisonment for black money stashed overseas, 300 per cent penal tax on the concealment of money overseas and some of the other provisions have made the intentions of the government clear. Worse, those found concealing income will not be permitted to go to the Settlement Commission. 
	 
	According to Forbes, India has the third highest number of billionaires after US and China. Since the government manages a mere Rs. 1008 crore from wealth tax, it has been done away with. A 2 per cent surcharge replacing wealth tax for the super rich should be easier for the government to administer. 
	 
	The finance minister plans to incentivise the use of debit and credit cards and disincentivise the use of cash. Barring that announcement, there was nothing major to tout on curbing the black money menace within the country. 
	 
	The middle class was expecting tax breaks from the party they voted to power just a few months ago. That has been a disappointment because barring the tax break for spend on health expenses to Rs. 25,000 from Rs. 15,000 and the odd other such rebate, there has been nothing to cheer about. Higher service tax means spending on telecom services, eating out and consuming other services will be more expensive. 
	 
	The monetisation scheme for gold is an interesting experiment to tap into the wealth locked up in Indian homes. A sovereign gold bond scheme with a fixed interest rate will allow Indian to earn money out of their investment while the government can hope that gold imports will be curbed, cutting down India’s foreign exchange spend. 
	 
	The finance minister has not put more money in the common man’s pocket. Clearly, it is industry that will have to drive the economic engine in the near term. 
	 
	About the author: The article has been authored by veteran financial journalist Ashutosh Sinha

Union Budget 2015: Not the common man's budget

The Union Government is formulating the budget to be announced on February 29, 2016. The officials in Ministry of Finance are busy with budgetary consultations. At the outset, it needs to be recognised that the Budget, especially the <keyword id="6360189" type="COMPANY" weightage="20" keywordseo="Union-Budget">Union Budget</keyword>, is more than a mere accounting exercise as it lays out a vision of the Government and then on a mission mode, provides a strategy to implement it during the course of that year or next. In fact, to achieve steady growth, fiscal policy of the country is embodied in the Union Budget. And the challenges in fiscal policy are a many which needs to be addressed immediately. The important concerns are that despite best efforts, industrial growth continues to be tepid; unemployment, especially amongst youth is high; agricultural output because of El Nino and other climatic conditions is low; consumer inflation is heading northward; and overall growth in the country is beginning to stagnate around 7- 7.5 percent when country has a potential to grow at 9 percent per annum. 
 
The Central Government is aware of the situation and has consistently been making efforts to revive the economy by announcing schemes like start-up India, MUDRA, Jan Dhan Yojana, make in India, Skill India, Digital India, and Smart Cities. The implementation of these schemes have yet not yielded higher growth. Therefore, probably, the Union Budget of 2016 needs to exclusively focus on measures to increase growth. To increase national output, three ingredients are most important – labor, capital and entrepreneurship. 
 
Women Participation in Workforce 
There are numerous empirical, studies that have demonstrated that increased female workforce participation can lead to significant macroeconomics gains. Similarly, equal access to inputs by women would raise productivity of female-owned companies. Further getting women to work would also help in improving the per capita income of the country. Increased income by women also leads to reduction in income equalities, as well as poverty. 
 
The participation of women in labour force can lead to increasing GDP of India by 27 per cent according to research done at International Monetary Fund, Washington, DC. In India, only about 30 percent of women are in workforce. In contrast, in Nepal, nearly 80 percent of women are in the workforce followed by China (71 per cent), Bhutan (67 per cent), and Russia (57 per cent). Closely co-related to low workforce participation are issues like persistency in preference for a male child reflected in adverse sex-ratio. As per the Census data, the state-wise child sex ratio (CSR; number of females per 1000 males in 0-6 year’s age group) in India during 2001-2011 has deteriorated though overall sex ratio recorded a marginal improvement over the years. 
 
To enhance female workforce participation, the Government could also consider more recruitment of women in armed and police forces. According to some estimates, women constitute only 3 percent of police force in India and a small number in Indian army. In contrast, women play an important role in armies of many countries, including the US, Israel, China, Russia, Sri Lanka and Pakistan. India could consider Sainik and Military schools/colleges for training female students and National Cadet Corps can be extensively used in colleges and Universities to show-case job opportunities in defence areas. 
 
There is substantial potential of jobs in defence forces. Illustratively, in the recent Central Seventh Pay Commission Report, it was mentioned that Indian Army is short of officers by nearly 25 percent while Navy is short by 17 percent and Air-Force by 4 percent. The defence forces have a provision of short service commission (SSC) which can be tailor-made to suit the psychology of Indian families which insist that females should get married and start their own family before thirty years of age. The SSC, with a provision of 5 or ten years of service is most suitable in such circumstances in India. 
 
Similarly, judiciary suffers from serious shortage of courts and legal staff especially in international comparison. It would be useful to have more female participation in legal services. This effort of encouraging women to work in defence and judiciary may also help in making India a safe place for women. 
 
To enhance female workforce participation, another out-of-the-box view needs to be considered. It is established that women generally demonstrate responsible behaviour in financial matters and their income is generally used to finance family expenditure. Therefore, the Government could consider offering higher or complete exemption from income tax for women participating in workforce. As the income earned by women is spent on family expenditure, and more women will be encouraged by this measure to enter the workforce, indirect tax collection on goods and services would improve, and therefore, in net, not impact the national or state fisc. Similarly, to incentivise female participation in self-employment, especially under micro, small and medium enterprises (MSMEs), tax holiday could be offered to MSMEs run by women entrepreneurs. The Government could also consider special provisions for women entrepreneurs and longer tax holidays under SUI, announced recently. 
 
Capital Mobilisation 
To provide opportunity to monetize gold, and financial resources for developmental activities, in a resource constraint economy, the Government had launched Gold Monetisation Schemes (GMS), including Gold Sovereign Bonds (GSB) in November 2015. The response is tepid with less than 4 tonnes of gold mobilised in last few months, and mobilisation seems miniscule compared to nearly 1,000 tonnes that the country imported annually, and holds a stock of nearly 21,000 tonnes. The reasons for the lacklustre response of GMS are manifold. The need is to actively extend the campaign to households, may be through use of vernacular press and electronic media. Also, from the market, the feedback on the scheme suggests that there are problems with collection and assessment of value, as only about 54 assayers in 30 cities are recognised, nation-wide. To make the scheme market friendly, assaying could also be assigned to select jewellers, especially branded chains, to ensure presence in at least all districts. To incentivize collection of gold, commission that is being offered to commercial banks, 2.5 percent including handling charges, could also be offered to select jewellers. 
 
Nurturing Entrepreneurship 
To nurture entrepreneurship, the Government has launched the Start-up initiative (SUI) which is expected to take India in the much needed fast forward ‘job-creation’ mode. India is poised to be the fastest growing economy in the world according to the IMF, and expected to average about 8 per cent in next five years. In addition, India has a very young population and the demographic dividends are waiting to be tapped. 
 
More importantly, young population of India, in substantial numbers, generally wastes 2 to 5 years of their age in preparing for competitive exams for government jobs. The number of years lost in such preparation, generally in vain for most students, could have been used more productively. As a matter of fact, seminal work done by research scholars which many times fetches them coveted Nobel Price is undertaken at young age, when taking risk in extending the frontiers of knowledge is easier. The SUI would be helpful in tapping that young age and creative mind for building industrial base of the nation. For the success of SUI, there is need to create an eco-system to produce entrepreneurs. The emphasis of the government should be setting up more world-class colleges, across India, specializing in commerce, law and business studies. The educational requirements of nurturing entrepreneurs is very different from producing managers and administrators for which our present educational system already has world ranking management institutes. India, now needs, world-class institutes on entrepreneurship, illustratively, Indian Institute of Entrepreneurs. 
 
Further, in Indian system of education and training, tolerance of failure is low but in Silicon Valley, in contrast, the practicing mantra is that failures are pillars to success. In fact, angel investors are more comfortable funding entrepreneurs who have failed in their maiden attempt. Such failures help to steel resolve, build passion to stay ahead of the race, and strengthen faith to face fierce competition as well as undertake meticulous planning. More than the young, mentors, parents and teachers also need to understand that SUI will result in some set-backs and should not get discouraged. To address the fear of failure, there is need to have a fall-back mechanism, and therefore the Government can consider some form of social security for entrepreneurs which could take a shape of insurance against such failures. In the US, in view of social security, the fear of failure is reduced, and therefore risk taking and entrepreneurial activity abounds. 
 
Conclusion The Union Budget needs to show way forward for an economy which is beginning to lose growth potential despite various policy initiatives. In addition to traditional tweaking of taxes and expenditure, there is need to formulate a vision or a long term fiscal policy to help steady <keyword id="47288" type="UNKNOWN" weightage="20" keywordseo="expectations">expectations</keyword> for growth initiatives from the government. That will help create conducive environment for private sector to flourish and take India on a higher growth path. 
 
 (The article is authored by Professor Charan Singh. He is the RBI chair professor of Economics at <keyword id="19478" type="CITY" weightage="20" keywordseo="IIM">IIM</keyword> Bangalore. He was a Visiting Fellow at Stanford University and Harvard University. Currently, he is also a consultant for IMF and his previous professional appointments include senior economist IMF , Director ( research department and debt management) at RBI)

You Searched For "Gold Monetisation Scheme" and got 8 results

SBI mobilises 13,212 kg gold through Gold Monetisation Scheme

PTI

Govt seeks industry suggestions to improve Gold Monetisation Scheme

PTI

Somnath Temple to invest around 35 kg idle gold in Gold Monetisation Scheme

BI India Bureau

RBI decides to fine tune gold monetisation scheme after lukewarm response

BI India Bureau

Narendra Modi’s ‘Golden’ gift to India on Diwali

BI India Bureau

Government's gold schemes are not attracting masses, says IGPC IIM-A study

BI India Bureau

Union Budget 2015: Not the common man's budget

Guest Author

Union Budget 2016: Need for Major Decisions

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