Comments
The Centre has mooted an idea of a standalone spot gold exchange to source the yellow metal from consumers, process it into coins and bars before selling them to jewellers in the domestic market. This is aimed at cutting down dependence on imports.
Addressing the third India International Gold Summit here on Tuesday, Shaktikanta Das, Secretary, Department of Economic Affairs, Ministry of Finance, urged the industry to deliberate on the idea and submit a concept paper which can be considered by the government.
“The gold exchange should be able to buy gold jewellery or coins from consumers who are willing to sell and channel the same to the industry. This will not only cut imports but also provide a transparent platform for both the industry and consumers,” he said after clarifying that it is not a policy announcement and the government is not even thinking on these lines.
Response for gold schemes The Centre recently announced three products – Gold Monetisation Scheme, Gold Bond Scheme and Sovereign Gold coin – targeted to cut imports and divert physical gold demand to financial asset.
Das said the demand for Gold Bond Scheme was encouraging with investors subscribing to 917 tonnes of gold worth ₹246 crore through 63,000 applications in just 15 days when the bond was available for subscription.
Though response for the Gold Monetisation Scheme has been lukewarm, it is too early days to gauge the outcome of the scheme and the government is in the process of seeking expert opinion to make it more attractive.
Temple collection JK Dadoo, Additional secretary, Ministry of Commerce and Industry, said the government should set up a team of high-level officers to interact with trustees of top 100 temples which have about 10,000 tonnes of the country’s total gold holding of 22,000 tonnes.
Even if the targeted effort attracts 10 per cent of the gold held by the top temples, it would result in an inflow of 1,000 tonnes per annum in the gold monetisation scheme and this is equivalent to the country’s annual imports, he said.
Rajnish Kumar, Managing Director, State Bank of India, said the bank would launch the Gold Monetisation Scheme in next 10 days and play a major role to make it a success given the bank’s reach across the country.
Bond pricing OP Bhatt, former Chairman, SBI, said the success of any bond issuance depends on its pricing and given the availability of long-term capital the government should initially price the bond marginally lower than the prevailing gold price and extend the tenure to 10-15 years from 8-10 years.
Somasundaram PR, Managing Director, World Gold Council, said the Centre should exclude the 10 per cent import duty when pricing the bond as there is a lingering fear that the value of bond will come down when the duty is removed.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.