What is/are the purpose/purposes of Government’s ‘Sovereign Gold Bond Scheme’ and 'Gold Monetization Scheme'?
- To bring the idle gold lying with India 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:
Detailed Explanation:
Answer: Option 3 — 1 and 3 only
✅ Statement 1 – Correct: The Gold Monetization Scheme (GMS) allows individuals and institutions to deposit their idle physical gold (jewellery, coins, bars) with banks. This gold is melted, refined, and brought into the formal economy, where it can be lent to jewellers and goldsmiths, thereby mobilizing household gold reserves.
❌ Statement 2 – Incorrect: Both schemes focus on managing domestic gold demand and supply. They are not designed to attract Foreign Direct Investment (FDI) in the gold and jewellery sector. FDI policies operate separately from these domestic gold management initiatives.
✅ Statement 3 – Correct: Reducing gold imports is a core objective of both schemes. The Sovereign Gold Bond (SGB) Scheme offers a financial alternative to physical gold, thereby reducing import demand. The GMS increases the availability of recycled domestic gold for jewellers, reducing their need for imported gold. Since gold imports significantly impact India's Current Account Deficit (CAD), these schemes help improve the balance of payments.
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