The Centre is preparing to roll out a revamped Gold Monetisation Scheme (GMS) in a fresh attempt to bring idle household gold into the formal financial system and reduce India’s dependence on costly imports.
India is one of the world’s largest consumers of gold, with households estimated to hold thousands of tonnes of the precious metal in the form of jewellery, coins and bars. Much of this gold remains unused, while the country continues to import large quantities every year, adding pressure on the trade deficit and foreign exchange reserves.
The proposed overhaul seeks to make the scheme more attractive for households by simplifying procedures and improving participation. The government is also exploring ways to strengthen the role of banks and other financial institutions in collecting, storing and monetising deposited gold.
Under the existing Gold Monetisation Scheme, individuals can deposit their gold with authorised institutions and earn returns instead of keeping it locked away at home. The deposited gold can then be refined and reused, reducing the need for fresh imports.
Officials believe the revised scheme could address some of the shortcomings of the earlier programme, which saw limited public participation despite its potential benefits. Complex procedures, lower awareness and concerns over parting with family jewellery were among the reasons many people stayed away.
The government hopes a simpler and more flexible framework will encourage more households to participate, helping mobilise idle gold while supporting domestic demand through recycled supplies.
A successful revamp could also benefit the economy by lowering import bills, improving resource utilisation and strengthening the country’s external finances. It is believed that wider participation would create a more sustainable gold ecosystem while giving households an opportunity to earn returns on assets that otherwise remain unused.
The revised scheme is expected to be announced soon, with policymakers aiming to strike a balance between preserving the emotional value of gold ownership and encouraging greater financial participation.
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