Jaitley introduces three news schemes to aid gold rush

The sovereign gold bond would have a fixed interest rate and be redeemable in cash in order to discourage purchase of the yellow metal.

Union budget, Arun Jaitley, Union Budget 2015, Narendra Modi, BJP government, 2015-16 Union budget, BJP union Budget, Modi Union budget, current account deficit, Gold import, gold price, gold world price, Charan Singh column, Indian Express column, IE column,

UNION BUDGET LIVE: A modified and newly crafted gold deposit scheme, with higher interest rates, should be extended to more branches of more banks.

With the current account deficit expected at 1.3 per cent of the GDP in 2014-15, the Union Budget plans to allow Indians to once again invest in gold and has also promised India’s very own gold coin

“India is one of the largest consumers of gold in the world and imports as much as 800 to 1,000 tonne, mostly, this gold is neither traded, nor monetised,” finance minister Arun Jaitley said on Saturday while presenting the Union Budget 2015-16.

Accordingly, he unveiled three new schemes for investments in the yellow metal. “I propose to commence work on developing an Indian gold coin, which will carry the Ashok Chakra on its face,” he said, adding that this would help reduce the demand for gold coins minster outside India and also help recycle the fold available in the country.

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Jaitley also announced plans to launch a gold monetisation scheme as well as a sovereign gold bond. While the gold moentisation scheme would replace both the present gold deposit and gold metal loan scheme, it would also allow depositors to earn interest on their gold metal accounts jewelers to obtain loans.

Similarly, the sovereign gold bond would have a fixed interest rate and be redeemable in cash in order to discourage purchase of the yellow metal.

The Centre had imposed restrictions on gold imports in 2013 when the CAD touched a record 4.7 per cent of the GDP in 2012-13, forcing it to raise the import duty on gold to 10 per cent. The RBI too imposed curbs on gold.

However, with an improvement in the CAD, the RBI had in November 2014 with drew the 80:20 scheme, under which 20 per cent of the gold imported had to be exported back.