Gold Monetization Schemes (GMS), guidelines has been issued by Ministry of Finance, Govt of India on 15-09-2015.
The objective of introducing the modifications in the schemes is to make the existing schemes more effective and to broaden the ambit of the existing schemes from merely mobilizing gold held by households and institutions in the country to putting this gold into productive use. The long-term objective which is sought through this arrangement 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 India’s exports. In fiscal year 2014-15, gems and jewellery constituted 12 per cent of India’s total exports and the value of gold items alone was more than $13 billion (provisional figures). The mobilized gold will also supplement RBI’s gold reserves and will help in reducing the government’s borrowing cost.
The revamped Gold Deposit Scheme (GDS) and the Gold Metal Loan (GML) Scheme involves changes in the scheme guidelines only. The risk of gold price changes will be borne by the Gold Reserve Fund that is being created. The benefit to the Government is in terms of reduction in the cost of borrowing, which will be transferred to the Gold Reserve Fund.
The scheme will help in mobilizing the large amount of gold lying as an idle asset with households, trusts and various institutions in India and will provide a fillip to the gems and jewellery sector. Over the course of time this is also expected to reduce the country’s dependence on the import of gold. The new scheme consists of the revamped GDS and a revamped GML Scheme.
Gold Monetization Schemes guidelines has also been issued by Ministry of Finance, Govt of India on 15-09-2015. The detailed office memoranda is as under: