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The World Gold Council has called upon the government to increase the supply of ‘India Gold Coins’ to encourage people to invest in the yellow metal.
At present, these coins are available only through MMTC outlets and select banks and its distribution should be accelerated by adding more features, such as buyback arrangements in banks, PR Somasundaram, Managing Director, WGC India, said.
Interacting with BusinessLine , he said that a proper marketing strategy for India Gold Coins will propel the right kind of demand and will resolve the problem of purity and melting loss while recycling gold. The total recycled gold in India in 2015 was 80.2 tonnes.
Moreover, the launching of the Gold Coins will prompt temples to deposit their gold in banks, as devotees may prefer gold-coin offerings instead of jewellery.
However, India Gold Coin is a relatively new product and it should take some time for demand to pick up, he added.
On the recent regulatory issues related to gold purchase, he said: “Gold is a savings product and its taxing is not right and it will be counterproductive.” He suggested increasing transparency in gold trade by simplifying the procedures and levying a reasonable tax.
He was also of the view that gold savings should flow through the banking system for the benefit of the economy and it would encourage savings, promote financial inclusion, and leverage passion for gold. Given the fascination of today’s youth towards electronic products, the new generation should also be attracted to gold investments with more features, such as gold accumulation benefits. Somasundram suggested creating a roadmap by articulating a gold policy for India to enhance the value of gold, which will benefit both the economy and the households. Gold tourism is one such step to promote investments in gold. Displaying for visitors ancient temple jewellery will help generate buying interest.
Marginal increase
Quoting statistics, he said, demand for gold last year had registered a marginal increase to 849 tonnes against 828 tonnes in 2014. In the fourth quarter, demand grew 6 per cent to 233 tonnes from 220 tonnes in the same period last year. “In 2016, we anticipate gold demand will be robust, especially with the forecast of good monsoon which would lead to improvement in rural income,” he said.
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