Business
Gold monetisation scheme needs re-examining: House panel chief
New Delhi, July 29
With the union cabinet
expected to soon take up the gold monetisation scheme (GMS) for
approval, chairman of the parliamentary panel on finance M. Veerappa
Moily has urged the government to revisit the plan as it was "unlikely
to take off in its present shape".
A cabinet note has been
circulated among the relevant ministries on the interest-bearing gold
monetisation, or deposit scheme, the draft guidelines on which were put
in public domain for comments in May.
The parliamentary panel
will examine the scheme as the industry players have submitted a
memorandum raising certain doubts about it, Moily said.
"This
scheme has to be re-examined and revisited. This is not my reservation
alone but many other people in the industry have (also) expressed that
it may not take off. There is no point coming out with a scheme which
will not take off," he told reporters on the sidelines of an event
organised here on Wednesday by industry chamber Assocham.
The committee will submit a standalone report on the gold monetisation scheme, Moily said.
The
objectives of the scheme, under which as little as 30 grams can be
deposited, is three-fold: Mobilise the gold, give a fillip to the gems
and jewellery sector by making gold available from banks on loan and
reduce the reliance on imported gold and conserve foreign exchange.
Addressing
the Assocham event, Moily said the government should take steps to make
the scheme "simple and easy to comprehend for the public at large".
"If a low rate of interest rate like 1 or 2 percent is offered for gold deposits, few people will come forward."
Noting
that the number of conditions laid out to open a gold deposit account
may act as deterrent, Moily asked the industry to make a presentation to
the panel on these issues.
"Maybe, we crystallise your ideas and submit a report to parliament to evolve a sound and proper policy on gold," he said.
Under
the proposed scheme, the interest earned from the monetisation scheme
will be exempt from income tax, wealth tax and capital gains tax to make
it attractive for households.
Banks will be free to decide the
interest, and both the principal and interest will be valued in gold.
Interest on the gold savings account will be payable after every 30 or
60 days of the opening of the account.