IB Times
Prime Minister Narendra Modi launching gold schemes on 5 November in New Delhi.PIB India

Praising the three gold schemes launched by Prime Minister Narendra Modi on Thursday, the World Gold Council (WGC) said that the schemes would present a wider choice for consumers.

"No one scheme or single way of buying gold is a total replacement of the other. Together, these options expand consumer choices," PTI quoted WGC Managing Director Somasundaram PR as saying.

PM Modi rolled out three gold schemes on 5 November, including the 'India Gold Coin' with the Ashoka Chakra minted on it.

The other two schemes - Gold Monetisation Scheme (GMS) and Gold Sovereign Bond Scheme - are aimed at reducing the physical demand for the yellow metal in the country.

"We believe that the Indian Gold Coin will guarantee purity and trust that is fundamental to gold. The Ashok Chakra Coin will become a part of the international basket of coins and could be an important contributor to exports," he said.

Under the GMS, the government plans to mop up gold worth nearly Rs 60 lakh crore from households and institutions in the country. Customers depositing gold with banks will get tax-free interest.

"We should see this announcement and launch as a strong indication of an intention to put gold at the heart of the financial system and make it work for the Indian economy. We should remember that even ATMs and demat accounts took time to become popular with a supportive eco-system," he said. 

The Reserve Bank of India (RBI) will issue gold bonds in various denominations under the sovereign gold bond scheme. The central bank has fixed the price of the bond at Rs 2,684 per gram. Investors will be paid a fixed rate of interest of 2.75% per annum on their initial investment.

India imports about 800 to 1,000 tonnes of gold annually and is the world's second largest consumer of the yellow metal, after China. The gold monetisation scheme is expected to help curtail the country's metal imports.

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