Amendments to gold monetisation scheme under consideration
The government is considering a proposal for setting up a Gold Spot Exchange under a comprehensive gold policy, a Budget 2018-19 document stated.
The document also stated that broad guidelines for amendment of the Gold Monetisation Scheme (GMS) was prepared and under consideration.
While the new comprehensive gold policy has been under discussion since long, the government, for the first time, stated that the GMS was being amended.
The scheme, announced in November 2015, to mobilise idle gold lying with households, has been a failure so far, as less than 20 tonnes of gold was mobilised.
Since a few months, the finance ministry has been holding discussions on amending the scheme, but there was no final word.
However, interim Budget proposals have been received well by jewellers from its possible impact on demand.
The document stated: “The draft policy for promotion of gold as a financial asset has been circulated to relevant ministries for comments, and the proposal for setting up a gold exchange is under consideration. Broad guidelines for amendment of the GMS has been prepared.”
The government had stated in the Union Budget that a comprehensive gold policy to make gold a financial asset had been circulated to various ministries.
The Centre has also amended the Gold Monetisation scheme which is now under consideration. Surendra Mehta, National Secretary, Indian Bullion Jewellers Association, said “additional disposable income in hands of farmer and middle class will increase gold consumption.”
He referred to several measures for spending in rural areas including cash transfer to farmers will increase rural income and part of that will be invested in gold.
Saurabh Gadgil, chairman and managing director of PNG Jewellers, said: “This Budget indicates that the ministry feels it is time to clean and organise the gems and jewellery industry by introducing a comprehensive gold policy to develop gold as an asset class, provisional guidelines are being made for Gold Spot exchange, Gold Deposit account, Gold Monetisation Scheme. We are hoping this Budget will bring about the confidence in the economy and benefit the industry in the long run.”
Jewellery exporters, however, are disappointed as their demands have not been met.
Pramod Kumar Agrawal, Chairman of the Gem and Jewellery Export Promotion Council, said: “We hope that with the capital infused in the banking sector and banks coming out of the prompt corrective action framework will help in solving the shortage of working capital for our exporters. At the same time, we are disappointed that the demand for decrease in import duty of raw materials like gold, silver, C&P diamonds and coloured gemstones were not included in the Budget today.”