The sum of three new gold schemes - The Hindu

The sum of three new gold schemes - The Hindu


13, 2015
This refers to the
article “The sum of three gold schemes”(November 13). It is true that from
Morarji Desai’s time, GOI, at various times did try to exploit the potential
concealed in the domestic gold stock in India without much success. This time
the difference is, there is a three-pronged effort to make individuals and
institutions to bring their gold holdings to the mainstream economy for
productive use which will also benefit them, to reduce the need to import gold
for ‘investment’ purposes by offering Sovereign Gold Bonds as an alternative
instrument which will appreciate in value and to instil confidence in the
capacity of India to ‘make in India’ by offering gold coins made in India for
It goes without saying that
ultimately the credibility of the implementing agencies will decide the success
of the schemes. The success of Sovereign Gold Bond Scheme and gold coins made
in India will be a trust-booster for the government and the central bank.
GOI and RBI should not further delay initiatives to putting in place an
institutional arrangement to support gold management.  Some preliminary work on setting up a Gold
Bank had already been done in RBI during 1990’s. While such an institution can
take care of regulatory and supervisory aspects, at this stage, authorities may
have to think in terms of dedicated professional institutions at the
regional/state level, which will handle gold from a banking angle. An apex body
should be equipped with linkages for import and export of gold and gold
products with borrowing and lending capabilities.
States like Kerala have successfully intervened in other similar sectors
like chits/kuris and
lotteries, which were also areas of exploitation by vested interests. Private
players had to fall in line and function with discipline and self-regulation.

M G Warrier, Mumbai


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