GMS Generates only 3 Tons of Gold

New Delhi: India’s Government may further tweak the Gold Monetization Scheme (GMS) with retrospective effect in view of lower collections so far and to make it more attractive for investors.

Economic affairs secretary Mr. Shaktikanta Das met Indian Bullion Association and jewellery industry representatives for their inputs to make the scheme more attractive as the scheme has garnered only 3 tons of gold, much lower than expectations.

“In the long term the GSM should succeed. We reviewed the difficulties in the scheme and took suggestions and now they are under consideration,” Mr. Das said after the meeting.

He said that gold received under the scheme was “lower than expected amount”, adding that temple trusts have “started showing interest in the gold scheme.”

Tax concerns have kept households and temples with about 20,000 tons of gold away from the scheme, finance ministry officials said. “Tweaking the scheme was discussed and it was proposed that changes in the gold monetization scheme should be applied retrospectively from the date the scheme started,” a finance ministry official said.

Earlier this month, the government opened the third tranche of bonds. The government had launched the first tranche of sovereign gold bond scheme in November for which it got subscription for 915.95 kg of gold worth Rs 246 crore. In January, it came out with the second tranche and received subscription for 3,071 kg gold amounting to Rs 798 crore.

Under the scheme, gold bonds are issued in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of 5-7 years with a rate of interest to be calculated on the value of the metal at the time of investment. The scheme has an annual cap of 500 grams per person.