India's government seeks to dissuade people from investing in gold

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Indian jewelers on strike:
... a dispute ... erupted this week between the nation’s thousands of jewelers and Prime Minister Narendra Modi. Intent on boosting revenue as he reshapes Asia’s third-largest economy, Modi wants to impose a 1 percent excise duty on jewelry produced and sold within the country, and Finance Minister Arun Jaitley announced the move in the budget on Monday. By Wednesday, members of the All India Gems & Jewellery Trade Federation, which represents jewelers nationwide, had started a three-day stoppage.
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http://www.bloomberg.com/news/artic...-with-gold-tested-as-tax-fight-spurs-shutdown
 

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The Centre’s ambitious plan to mobilise an estimated 22,000 tonnes of gold lying idle with households appears to have fallen flat with its own statistics showing that the collection has nearly halved to merely 6,500 kg in 2017-2018 from close to 11,500 kg in 2016-2017.

The sovereign gold bond scheme (SGB) was launched by Prime Minister Narendra Modi in 2015. Since then, the authorities have barely collected 23 tonnes of gold.

The government has issued SGBs worth Rs 6,661.42 crore for 22.88 tonnes till March 2018, the latest report released on the Centre’s debt management, said.

Now, the government’s policy think tank Niti Aayog has suggested that the scheme be made more attractive.

SGB is a government security denominated in grams of gold. The idea behind its launch was to migrate investment from physical gold to paper gold. One of the key objectives was to reduce the pressure on Current Account Deficit (CAD) and the rupee, arising partly from heavy imports of gold and consequent foreign exchange outflow.

The product was targeted at retail investors who generally prefer to invest their savings in physical gold.

However, SGB, which comes with a five-year lock-in period, has since not been able to replace physical gold buying. ...
More: https://www.deccanherald.com/business/centres-gold-bond-scheme-fails-713958.html
 

ancona

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Modi is an idiot. Indians will never part with their physical gold. Not only do they not trust the government, they have even less trust in the paper instruments invented by the same government. Modi Should know better than that. As far as the estimated amount of gold in private hands, I would say the original estimate is light. If you add up all the gold held by temples as well, it could well be double that. Remember, those temples simply accumulate that gold, they do not use it. Some of those temples have been around for a thousand years. And the families? They hand that stuff down for generations, also accumulating it as jewelry.
 

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The Reserve Bank of India’s direction to all lenders to promote and publicise the Gold Monetisation Scheme (GMS) from their branches underscores the intent of the banking regulator to make the Scheme a success, said officials from two private banks. The Reserve Bank of India (RBI) on August 16 directed all scheduled commercial banks (except regional rural banks) to promote the Gold Monetisation Scheme that was introduced on October 22, 2015 to replace the Gold Deposit Scheme, 1999.

“All designated banks shall give adequate publicity to the Scheme through their branches, websites and other channels,” said the RBI.

An official from a private sector bank said this “underscored” the importance RBI was giving to the Scheme . Until the August 16 circular, banks were accepting gold deposits under the Scheme but were not actively promoting it, added the banker.
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https://economictimes.indiatimes.co...on-to-get-more-teeth/articleshow/70730966.cms
 
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