Indians have an estimated 22,000 tonnes of gold lying in their households, equivalent to what the country would have imported in 26 years to make jewellery, bars and coins.
To unleash this idle gold and help reduce imports, gold trade bodies have written to the government, urging to make the Gold Monetisation Scheme (GMS) lucrative in the upcoming budget by offering flexible tenures for gold deposits, higher interest rates and also assuring depositors that there would be no tax enquiries up to 500 grams of ancestral gold deposits in banks under the scheme.
Revamping of the GMS is the need of the hour as the country spent a record $47 billion on gold imports in the first 11 months of 2024, surpassing the $42.6 billion spent in 2023, as gold prices surged to a record high, the industry bodies said.
They said the government should revise the GMS to facilitate the participation of recognised and reputed retail jewellers, who can convince customers to unlock the idle gold lying in the lockers. India imports 800-850 tonnes of gold.
On Friday, gold was trading at ₹77,908 per 10 gm in the physical market.
Rajesh Rokde, chairman of All India Gem & Jewellery Domestic Council, said, “Despite its potential to mobilise 22,000 tonnes of gold, GMS participation remains low due to procedural and trust issues. We have written to the government to exempt up to 500 grams of ancestral gold deposits from tax enquiries to build trust.”
He said banks should offer flexible tenures to cater to the diverse depositor needs.
Current rules allow a minimum deposit of 10 grams of raw gold (bars, coins, jewellery excluding stones and other metals) at a time, while there is no maximum limit for deposit under the scheme.
The scheme allows deposits for short-term (one-three years), mid-term (five-seven years) and long-term (12-15 years).
While mid-term and long-term deposits attract an interest of 2.25 per cent and 2.5 per cent respectively, the interest on short-term deposits is decided by the bank concerned.
