New Delhi, Nov 5: Prime Minister Narendra Modi today launched a scheme to channelise gold worth over Rs 52 lakh crore lying with households into the banking system and floated paper bonds to curb its imports that have made India the largest buyer of gold in the world.
India imports a staggering 1,000 tonnes of gold every year, draining out foreign exchange and putting pressure on the fiscal deficit. An estimated 20,000 tonnes of gold worth over Rs 52 lakh crore is lying with households and temples.
Modi also unveiled the first ever Indian gold coin and bullion, bearing national emblem Ashok Chakra on one side and Mahatma Gandhi's image engraved on the other side.
Describing the schemes as an example of "sone pe suhaaga" (icing on the cake), the Prime Minister said people should take advantage of these plans and help in nation building.
Under the Gold Monetisation Scheme (GMS), 2015, banks will collect gold for up to 15 years to auction them off or lend to jewellers from time to time. Depositors will earn up to 2.50 per cent interest per annum, a rate lower than bank deposits.
With the objective to bring down physical buying of gold, the Sovereign Gold Bonds Scheme was launched that offers 2.75 per cent annual interest rate. Buyers will have to disclose their permanent account number (PAN) and other know your customer (KYC) documents. Initially the coins will be available in denominations of 5 and 10 grams.
A 20 gram bullion will also be available through 125 MMTC outlets. Observing that there is no reason for the country, which has 20,000 tonnes of gold lying idle with households and institutions, to remain poor, he said, with some efforts and right policies India can get rid of this tag of (poor nation).
Speaking on the occasion, Finance Minster Arun Jaitley said it is essential to discourage gold imports and the bond scheme is expected to lower demand for physical gold.