The Government may further tweak the gold monetisation scheme with retrospective effect in view of lower collections so far and to make it more attractive for investors.
Economic affairs secretary Shaktikanta Das met Indian Bullion Association and jewellery industry representatives for their inputs to make the scheme more attractive as the scheme has garnered only 3 tonnes of gold, much lower than expectations.
“In the long term the gold monetisation scheme should succeed. We reviewed the difficulties in the gold monetisation scheme and took suggestion and now they are under consideration,” Das said after the meeting.
Das said that gold received under the scheme was “lower than expected amount”, adding that temple trusts have “started showing interest in the gold scheme.”
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Tax concerns have kept households and temples with about 20,000 tonnes of gold away from the scheme, finance ministry officials said.
“Tweaking the scheme was discussed and it was proposed that changes in the gold monetisation scheme should be applied retrospectively from the date the scheme started,” a finance ministry official said.
Prime Minister Narendra Modi had launched the gold scheme last year to incentivise households and temples to invest idle gold and to curb physical demand for gold, which forms the second highest constituent of India’s import bill after crude oil. The government has already proposed tax exemption from capital gains for depositors under the gold monetisation scheme.
The scheme was fine tuned in January allowing premature redemption, commission to bankers and depositors being allowed to go directly to the refiner rather than only through collection and purity testing centres. The government had also announced sale of gold bonds along with monetisation scheme in a bid to reduce the demand for gold.
Earlier this month, the government opened the third tranche of bonds. The government had launched the first tranche of sovereign gold bond scheme in November for which it got subscription for 915.95 kg of gold worth Rs 246 crore. In January, it came out with the second tranche and received subscription for 3,071 kg gold amounting to Rs 798 crore.
Under the scheme, gold bonds are issued in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of 5-7 years with a rate of interest to be calculated on the value of the metal at the time of investment. The scheme has an annual cap of 500 grams per person.