Modi's Gold Plan Unveiled: Government Aims to Harness Idle Wealth
The Indian government is considering launching a voluntary gold disclosure scheme to collect idle gold from private hands and reduce imports.
The proposal, which has been discussed by an empowered group of ministers and officials in the Prime Minister's Office, aims to put idle gold to use and bolster the country's foreign exchange reserves.
In 1993, India successfully used a similar scheme called the Gold Bonds Scheme, which collected 41.12 metric tonnes of gold valued at Rs 1,534.40 crore. The scheme offered subscribers immunity from inquiries about the nature and source of their gold in exchange for a five-year tenure.
Today, India faces a different gold problem as it imports over 700 tonnes of gold per year, exacerbating its current account deficit. Experts point out that despite a surge in gold prices, demand remains intact, with 50% of recent demand being for investment purposes.