by Mr. Jayant Manglik, Chair, FICCI Working Group on Commodities and President – Retail Distribution, Religare Securities Ltd.
The Gold Monetisation Scheme (GMS) has been announced, as promised in the last budget. It is one of three parts of the strategy to address the problem of India being the largest importer of gold worldwide, consistently. This love for bullion has hurt India’s Current Account Decit (CAD) year after year. After crude oil, gold is our biggest import and led to 4.8% CAD in 2012-13. Therefore a long-term gold policy which can achieve the conicting objectives of quenching our thirst for gold while preventing foreign exchange outow was a long time coming. Clearly we have to make the huge amount of gold available in India productive and the GMS tries to do exactly that by monetizing the much-quoted, but really a guesstimate number, of 22,000 tons of gold worth about US$ 1 Trillion (about Rs 66 Lac Cr) accumulated by Indian households.
