Gold traders of Ludhiana have given a mixed reaction on the new gold monetisation scheme as well as developing of an Indian gold coin. While some believe that the steps would reduce gold import from other countries, others say that little has been done for bringing gold industry on track.
Union finance minister Arun Jaitely on Saturday announced the budget for 2015-16 in which he proposed 'gold monetisation scheme'. As per Jaitely, India is one of the largest consumers of gold in the world and imports as much as 800-1,000 tonnes of gold each year. He said that though stocks of gold in India are estimated to be over 20,000 tonnes, this gold mostly is neither traded, nor monetised.
For this, a proposal for introduction of a gold monetisation scheme, which will replace both the present gold deposit and gold metal loan schemes, was floated during Jaitely's speech.
The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewelers to obtain loans in their metal account. Banks/other dealers would also be able to monetise this gold.
Ludhiana traders say that the scheme would allow benefits to the gold traders because their gold would be monetised and they could get a loan of the same value of the gold instead of getting few percent of the actual cost of gold.
Ludhiana Jewellers Association president Anand Sikri said that hopes of jewellers have been dashed with no new sops being announced by the government. "No details of gold monetisation scheme have been given during the budget speech. Small gold traders have not been benefitted in any way with the budget,"said Sikri.
Jaitely also announced to commence work on developing an Indian gold coin, which will carry the Ashok Chakra mark. The coin would be developed to ensure reduction in the demand for coins minted outside India. It will also help to recycle the gold available in the country.
Sanjeevan Dhir, president of Swarnkar Sangh Punjab, said that instead of reducing import duty on gold, the government has focused on corporate and big industrialists. "The government should have reduced the import duty on gold to benefit small traders,"said Dhir.
Interestingly, some gold traders have also hailed the union budget stating that the monetisation scheme would reduce the demand of gold from other countries. "If gold is monetised, those stocks that aren't so far used would come into the market and there would be less demand of gold imports,"said Tribhuvan Thapar, a gold trader of the city.