Union Cabinet gives nod to introduction of Gold Monetization Schemes
The Union Cabinet approved introduction of Gold Monetization Schemes (GMS) in a bid to lure away Indians from buying physical gold.
The approved schemes are Gold Deposit Scheme (GDS) and the Gold Metal Loan (GML) Scheme which were announced by Government in 2015-16 budget.
Objectives of schemes
- To make the existing GMSs schemes more effective and to put the gold into productive use held by households and institutions in the country rather than only mobilising it.
- The long-term objective is to reduce the country’s reliance on the import of gold to meet domestic demand.
GMS would benefit the Indian gems and jewellery sector which is a major contributor to country’s exports by accounting 12 per cent of total exports. It would enable depositors to earn interest on their on their gold accounts.
These schemes are in addition to the implementation Sovereign Gold Bond Scheme (SGBS) which was approved by the Union Cabinet. Under this scheme, bonds will be issued with an interest rate decided by Union Government and calculated on value at the time of investment.