India gold plan refuses to take off

|By Arabian Post Staff| The gold deposit scheme launched with great fanfare by Prime Minister Narendra Modi two weeks ago has so far attracted only 400gm, Indian newspapers reported.This is against a national hoard estimated at 20,000 tons.

Modi has urged people to put gold stashed in homes and temples in the bank, offering modest rates of interest that earlier schemes have lacked. The government has also launched ‘paper’ gold in the form of gold-backed bonds.

A shortage of centres to assay the gold being put on deposit is a problem that the government has agreed to address, said Anil Sankhwal, northern regional chairman of the Gem and Jewellery Export Promotion Council.

“Only 400 grammes have been deposited so far,” Sankhwal told reporters after meeting Finance Ministry officials. “The government has agreed to review the scheme and open more centres for gold testing and depositing in banks.”

Gold is greatly valued, not just as a wedding gift but also as a way to keep wealth away from the prying eyes of the taxman.  This is the big challenge in weaning people away from the metal.

A Finance Ministry official said the government had agreed to increase the number of testing centres and refineries involved in the scheme. There are 29 testing centres and four refineries currently accredited to it. The number of testing centres will increase to 55, and refineries to 20, by the end of the year.

Another scheme, to mint gold coins, is going a bit better than the deposit scheme. Buyers have acquired 6,200 of the Ashoka Chakra coins.