Indian Gold Schemes launched by Prime Minister – pros and cons

Honourable Prime minister of India, Shri. Narendra Modi had launched 3 gold related schemes in the Indian market. This was primarily done with the intent to reduce the demand of physical yellow metal from the Indian commodities market. The reason to introduce these schemes was that gold has been dominantly formed the bulk of India’s imports for over decades which has resulted in the crippling of the India’s Current Account Deficit (CAD). CAD is a term used in terms of import costs gets higher as compared to the revenue earned by the exports.

Prime Minister unveiled its first scheme i.e. Indian Gold Coin. The second scheme thus launched was the Gold Monetisation Scheme and lastly the Government announced Sovereign Gold Bond Scheme.

Indian gold coin

Indian Gold Coin

This Indian Gold Coin is very much unique in its presence for it shows various counterfeit measures and tamper proof packaging. The coins will be issued in the denominations of 5 and 10 grams. It come inscribed with the Ashok Chakra.

gold bar

Gold Monetisation Scheme

The gold monetisation scheme is one of the specialised schemes launched by the government of India in the hope of boosting the gold market and reduce the capital crunch. The gold whether in the form of raw or gold jewellery can be deposited in the nearby bank and the users will then earn interest over it. The primary intention is to leverage the untapped potential large quantities of gold lying idle in the safe zone of cupboards at home.

Gold Sovereign Bond Scheme

Instead of buying gold in physical form investors can park their money in bonds which are backed by gold. The bonds will be available both in demat and paper form. Sovereign Gold Bond has more or equal advantage against the physical gold.

The Indian government has been very much positive in looking forward to gain the benefits of this newly launched schemes. However, there is a cause for concerns in these highly ambitious schemes.

gold sovereign bond scheme


  • In Gold Monetisation Scheme, the intention was to uncover the the gold jewellery from home and allure the users to deposit in the bank. This could backfire the plan if the gold to be deposited in the bank is imported i.e. fresh gold shall be kept in the bank.
  • Also, the gold deposited in the bank will be returned in the form of gold bar or a coin which is the most demotivating factor for Indian women who consider gold as a Dhan Lakshmi or women’s ornament.

The government must consider these factors before aiming for any obnoxious results. If the scheme functioned the way they were programmed to, there is no doubt that it will fetch better returns to the Indian economy


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