What is/are the purpose/purposes of Government’s ‘Sovereign Gold Bond Scheme’ and ‘Gold Monetization Scheme? [2016]

What is/are the purpose/purposes of Government’s ‘Sovereign Gold Bond Scheme’ and ‘Gold Monetization Scheme?

To bring the idle gold lying with Indian households into the economy
To promote FDI in the gold and jewellery sector
To reduce India’s dependence on gold imports

Select the Correct answer using the code given below:

1 only
2 and 3 only
1 and 3 only
1, 2 and 3

Explanation

Statement 1 is correct

Both the Sovereign Gold Bond Scheme and Gold Monetisation Scheme aimed to mobilise idle gold held by households and institutions and bring it into the formal financial system.

Statement 3 is correct

By mobilising domestic gold and offering financial alternatives to physical gold, the schemes aimed to reduce gold imports, thereby helping improve the current account balance.

Infographic explaining Sovereign Gold Bond Scheme, highlighting its launch in 2015 under Gold Monetisation Scheme and RBI issuance on behalf of Government of India. Key features include 1 gram bond units, 8-year tenure with exit options, 2.50% fixed annual interest, tax benefits, collateral use, and maturity payout in rupees based on gold prices.

Statement 2 is incorrect

These schemes are not aimed at promoting Foreign Direct Investment (FDI) in the gold and jewellery sector. Instead, they focus on utilising domestic gold to meet demand and reduce imports.

Answer: (c) 1 and 3 only; Difficulty Level: Easy

2016, PYQs