How helpful is Sovereign Gold Bond scheme in decreasing India’s Gold import?

India is country where since time immemorial people especially women have been highly fascinated towards gold, be it wearing in the form of jewellery or storing it in the house as an asset which can be used in the form of rescue during the time of crisis. This huge craze for gold had made us Indian go insane as much as that we are one among the world’s largest importers of gold. Countries gold import in the fiscal year 2020-21 was 35.8 billion Dollar. Most people buy gold as an investment and storing purpose to hide black money. Seeing this Indian government has come up with a new financial scheme known as Sovereign Gold Bond (SGB). Under the scheme, an individual can buy gold and store it virtually in his or her online account. The scheme states that the buying process will commence in six-phase wherein one has to buy a minimum of 1 gram of gold and the maturity period for the same will be eight years with an exit option after five years. The government also provides cashback to those buyers who do the whole buying process online. The scheme has been designed in such a way that it provides an option of investing in gold without buying any physical gold thus reducing our gold imports. Having said that, the gold is the second most-largest commodity import by us after fuel, the scheme may emerge as a grand success if implied successfully. Reduction in gold import will help our forex consolidate more and more also our balance sheet will improve a lot.

Month: Current Affairs - September, 2020