Interim Budget Likely to Deliver Big Push to Gold Sector Reforms

The upcoming Interim Budget in India is likely to offer big push to several gold schemes.

The government plans to introduce a gold savings account, whereby customers will be credited with gold equivalent to the money deposited in their account, calculated based on the prevailing market rates. The scheme allows deposit of money equivalent to as low as one gram of gold. Like normal bank cash savings account, the gold savings account will have passbook facility. Moreover, customers will be provided with the option of redeeming cash, based on the market rate of gold lying in their account.

In addition, the government plans to introduce certain operational changes to the existing gold monetization scheme, in order to make it more attractive to customers. It must be noted that the scheme has not been able to garner healthy customer response. Proposals to hike the interest rates and reduce the tenure of deposits are under consideration. Incidentally, the government targets nearly Rs 5,000 crores from various gold schemes including monetization, gold bonds and coins in the fiscal year 2018-’19.

There have been reports that Finance Ministry may likely reduce the import duty on gold by 50% from existing level of 10% to 5%, a demand that the country’s gems and jewellery sector has been demanding for a long time. Other expectations include announcement of a comprehensive gold policy, covering all aspects of the troubled sector.