Economy Current Affairs for Civil Services

1. Gold Schemes
By: Harveer Singh
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This PPT is for educational purpose only. The learner is expected to supplement the video lecture
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taken in preparing the material but the tutor or superprofs would not be responsible for any error
or consequences arising out of it.
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2. • In the past five years, the average demand for
gold has been 895 tonnes annually, roughly
one-fourth of the global gold demand.
• he World Gold Council’s estimate, India’s stock
of gold could be as much as 22,000 tonne.
• Cost of India’s gold imports is next only to oil
and more than what it spends on importing
fertilizer
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3. Gold Schemes
•Gold Monetization Scheme
•Sovereign Gold Bonds
•Gold Coins
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6. • The bonds will be issued by RBI on behalf of the
government. Linked to gold prices, they will be
sold in rupee denominations of five, 10, 50 and
100 grams of gold and the investment is capped
at 500 grams annually per person. Carrying a
minimum tenure of five to seven years, such
bonds can be used as collateral for loans and may
be traded on exchanges. The redemption will be
based on the prices of gold at that time. These
bonds will be part of the government’s borrowing
programme and may offer a decent coupon.
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7. • The gold bond may be a good substitute to
physical gold. If a reasonable interest coupon is
set, it’s a bonus for investors as neither physical
gold nor ETFs account for this additional earning.
However, you should keep in mind that you will
still have to bear the risk of downside in gold
prices over longer periods. Taxation at par with
physical gold is also helpful. The monetisation
scheme gives you an avenue to make the gold
you have more productive. But the 500 gm
annual cap in both the schemes might limit
inflows.
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8. • The first gold bond—a 6.5%, 15-year
instrument—was floated in November 1962, but
it could collect only 16.7 tonnes. March 1965 and
it could mobilize even less, only 6.1 tonnes.
• the National Defence Gold Bond scheme in 1980
raised 13.7 tonnes and another gold bond,
opened for subscription in March 1993 for three
months, mopped up 41.12 tonnes.
• gold deposit scheme 1999: Lukewarm Response
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9. • Those who buy gold coins and bars identify
bullion as an investment avenue but attracting
those who buy gold jewellery remains a
challenge.
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10. Thank You.
•For any
feedback/query/word of
thanks, the Tutor can be
contacted at
harveersinh@gmail.com
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