The India Gold Policy Centre (IGPC) of IIM Ahmedabad in its workshop held on Oct 27, 2015 to discuss the Gold Monetisation Scheme and Sovereign Gold Bonds Scheme of Government of India visualises 3 major benefits arising out of the twin schemes to boost the growth engine of Indian Economy and in controlling the prices of yellow metal globally. The workshop saw active participation of top bankers, NBFCs, hallmarking agencies, jewellers, gold refiners, trusts, bullion traders, bullion logistics companies, assaying centres, commodity investors, traders, academicians, economists who expressed their views on various aspects of the scheme.
Experts at IIM Ahmedabad are of the view that the Gold Monetisation scheme will reduce India’s import bill, will cub smuggling practices and will control global prices of gold.
The views and opinions expressed at the workshop will be presented as White Paper to Government of India as an on-ground feedback to the gold monetization scheme approved by the Union Cabinet recently. Union Government proposes to launch the Gold monetization on the occasion of Diwali this year.
Speaking about the objective of the Government to launch the Gold Monetisation scheme, Dr Saurabh Garg, Joint Secretary (Investment), Department of Economic Affairs, Ministry of Finance shared, “The objective of launching the gold monetisation schemes is to mobilise the gold held by households and institutions and mainstream these savings into the financial system so that they are put to productive use.”
The Gold Monetisation Scheme and Sovereign Gold Bonds Scheme were approved by the Union Government with the vision to mobilise gold held by households and institutions like temple trusts, to help reduce import bill.
Gold is the second item after the Crude Oil which forms the biggest on India’s imports list. India is the biggest buyer of Gold globally. The country imported gold worth $34 billion in the fiscal year 2014-15 and in the first half of fiscal 2015-16 it has seen gold imports increasing further compared to the same period in last year.
Turkey and India appear to have similarities on Gold Monetization scheme. Turkey has also monetized its gold successfully, claims Erkan Kilimci, Executive Director, Central Bank of the Republic of Turkey (CBRT). According to him Indian and Turkish people prefer physical gold as traditional investment. Besides, a sustained high level of inflation induced households to purchase gold in Turkey. However once Turkish banks were allowed to hold a fraction of their reserve requirements, for currency liabilities, in gold and foreign exchange, the gold deposit accounts were offered to residents to unlock their gold. These Gold deposit accounts increased substantially by pulling physical gold in to the financial system.
The India Gold Policy Centre (IGPC) is a part of IIM Ahmedabad and is sponsored by World Gold Counci. The centre is a Centre of excellence, conducting cutting-edge applied research on the Gold Industry in India. It shares deep insights to suggest ways at both policy as well as execution level.
Prof. Jayanth Varma, head of IGPC-IIM Ahmedabad said while addressing the workshop “This workshop reflected a diverse range of opinions on gold monetization. We are glad that views of multiple stakeholders can be presented to policy makers. If India is able to monetize a small fraction of available gold, it will have a cascading positive effect on various sections of our economy.”
IIM Ahmedabad has consistently been ranked as the top B-school in the country year after year in the last several years. In 2008, IIM Ahmedabad also became the first business school in the country to be awarded EQUIS (European Quality Improvement System) accreditation. This accreditation awarded by the EFMD (European Foundation for Management Development) certifies that the quality of IIMA’s academic processes and programmes are on par with the best business schools globally that have similar accreditation.
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