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Draft Sovereign Gold Bond Scheme

Start Date :

Jun 17, 2015

Last Date :

Jul 02, 2015

17:00 PM IST (GMT +5.30 Hrs)

Submission Closed

The Finance Minister in his budget speech for the Union Budget 2015-16 made the following announcement: ...

The Finance Minister in his budget speech for the Union Budget 2015-16 made the following announcement:

“India is one of the largest consumers of gold in the world and imports as much as 800-1000 tonnes of gold each year. Though stocks of gold in India are estimated to be over 20,000 tonnes, most of this gold is neither traded, nor monetized. I propose to… develop an alternate financial asset, a Sovereign Gold Bond, as an alternative to purchasing metal gold. The Bonds will carry a fixed rate of interest, and also be redeemable in cash in terms of the face value of the gold, at the time of redemption by the holder of the Bond.

Accordingly, a draft outline of the Scheme has been prepared. Comments and views are invited on the draft scheme by 2nd July, 2015.

(The outline of the Sovereign Gold Bond Scheme is only at the draft stage and is being placed here to obtain public opinion. The scheme as it stands at this stage, does not imply any commitment from the government)

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Swapnil Karkare 10 years 9 months ago

(pg4) 6.Lock in of 3 years is suggested.No one will lock in for more than that term unless it seems to be very attractive.Suggestion:-if redeemed before 3 yrs,then disallow(i.e. taxing) d deductn already taken(Refer my earlier point-suggesting Chp VI A Dedctn) 7. Planners shall think,how ppl will buy bond instead of physical gold.ppl purchasing gold for investments which are mostly HNIs/higher cls/middle class.Hw attractive d bonds to thm shall b?it is more of emotional thing thn financial.

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Swapnil Karkare 10 years 9 months ago

(pg 3) 4. In draft,it is said that Tax shall be same as per the physical gold.Being indifferent is right thing,but I fl to instigate or promote or influence ppl at large scale,Chapter VI A deduction is an useful tool.Give deductn of say 10k-20k.Tax d interest instead or the Cap Gains. Also one issue needs to be addressed,there will b capital appreciatn as well as nominal interest@2%. so taxing both interest and Cap gains is a bad idea.Wont attract. 5. 5 yr/7 yr is suggested.But wat is lock in?

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Swapnil Karkare 10 years 9 months ago

(pg 2) 3. If face value is not proper and these bonds fail to charm ppl,then higher FV bonds will b issued.then wat?there will be need of Issue I(FV-26k in Dec 2015)..thn Issue II(FV-27k in Mar 2016)..III(FV-28k in June 16) and so on..which will actually create lot of ISSUES!thn don't frgt Derivatives of such bonds.Lots of issues.So its better to make the instrument simple.Suggestion:-At maturity the Mkt price shall b given.For purchasing too,mkt price shall be payable.thn only it would attract

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Swapnil Karkare 10 years 9 months ago

(pg 1) 1. If people will be getting similar returns then only they will invest in such bonds. 2. Draft says that at maturity only face value will be given. Clarification as to what is face value of the bond in this context is needed. If the face value is say for e.g. 27000 per 10 gms (approx.;some avg)then chances of ppl availing this is lowered.if it is say 30000 per 10gms (futuristic amt on higher side)and what if the mkt value after 5 years is lesser than it?Wl govt bear the loss??

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SURENDRA MEHTA 10 years 9 months ago

All the jewellers in this country are fooling innocent customer by charging them 24 carat gold rate of commodity exchange as shown by all television channels for sale of 22 carat or 18 carat jewellery. Thus customers are looted to the extent of 10% to 25% by jewellers. RBI has permitted India Bullion and jewellers association (IBJA) to publish rates of 22 carat jewellery and ministry should instruct all channel to compulsorily show IBJA published rates.

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SURENDRA MEHTA 10 years 9 months ago

India Bullion and Jewellers Association (IBJA) is giving pulse rate of Gold since last 67 years. IBJA gives rates for physical gold and this are not contract rates as determined by the exchange. The entire media and all exchanges are misguiding the nation about gold price. Govt. can check that physical gold is traded in the market at IBJA rates declared on daily basis as per RBI circular and not as per commodity exchange rates. How can exchanges which deals in future market decide spot rates ?

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Amit Mohitkumar Sahita 10 years 9 months ago

MCX is one of the world’s largest bullion futures exchange in terms of the number of contracts traded. The high volume is clear indication of continued faith in MCX, an established benchmark of Gold prices and quality.

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Rathi Iyer 10 years 9 months ago

Reserve Bank of India vide its various circulars has authrosied India Bullion and Jewellers Association Limited (IBJA) to Publish Opening and Closing price of Gold every day. As per RBI Circular, this IBJA Published Gold rates are to be taken by all Bank and NBFC for grant of loan against Gold Jewellery. We do not understand why there is need to bring in any other agency to determine gold rates. IBJA has been publishing this rates since last 67 years and accepted by RBI. #GoldBondScheme

IBJA.pdf

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SURENDRA MEHTA 10 years 9 months ago

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Arpit_3 10 years 9 months ago

MCX exchange has a very good network and penetration across india and thus should be considered as a benchmark price. It is being used as benchmark price with the jewellers since a decade now and should not be disturbed. Government scheme is really beneficial for rural people of india and thus no confusion should be created.

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