Author: Paul Ploumis06 May 2015 Last updated at 07:43:55 GMT
NEW DELHI (Scrap Monster): The ‘gold monetization scheme’ proposed by the Union Finance Minister during his Budget speech is reported to be at its final stages of design. The country’s finance Ministry is in final consultations with stakeholders in an attempt to introduce the scheme at the earliest.
The proposed scheme is expected to pay higher returns to investors when compared with the existing schemes. The Finance Ministry plans to make repayment on maturity in rupees equivalent to the price of gold at that time. The interest rates too will be paid in rupees, but as a percentage of gold prices, sources said.
The gold collected through current gold monetization scheme is melted only at government mint. This leads to unnecessary delays as it takes more than a month for the mint to issue purity certificate on the deposited gold. According to Finance Ministry sources, over 200 assaying centres including those in private sector will be utilized to make the process faster. The network will be expanded further so that the depositor receives purity certificate within a day. Moreover, banks will be allowed to recruit authorized agents to mobilize more gold deposits. Jewellers and other agencies are expected to become part of this network.
As per sources, the government plans to lower the minimum gold deposit from 500 grams to 50 grams. The schemes are likely to offer interest rate between 1.5% and 2% per annum. The depositor’s account will be credited with 1.5%-2% of the gold price prevailing at the end of the year. The new ‘gold monetization scheme’ will be exempted from wealth tax and capital gain tax. The government also plans to introduce nomination and loan facility on deposited gold.
According to government estimates nearly 22,000 tons of gold are lying idle with Indian households and temples. The existing scheme has been successful in mobilizing only 15 5onnes of gold in the past fifteen years.