Gold bonds mop up Rs 246 crore

Economic Affairs Secretary Shaktikanta Das on Friday tweeted the scheme evoked "excellent response for an innovative product"

The sovereign gold bond scheme has evoked "excellent response", with the government receiving 63,000 applications for purchase of bonds worth Rs 246 crore in the first tranche, Economic Affairs Secretary Shaktikanta Das said on Friday.

"Excellent response for an innovative product", Das said on social media site Twitter.

Last week, gems and jewellery industry representatives met Das and discussed ways to make the scheme attractive. The industry associations urged the government to allow certified jewellers to act as collection agents for the gold monetisation scheme and the finance ministry had reportedly agreed in principle.

There are 350,000 jewellers in the country, of which 13,000 are certified by the Bureau of Indian Standards.

Aimed at providing an alternative to physical gold, the government had sold gold bonds through banks and post offices between November 5 and November 20. The allotment will take place on November 30. The gold bonds will offer investors an annual interest rate of 2.75 per cent and a choice to buy bonds worth two gm of gold, up to a maximum of 500 gm. The issue price of the bond for this tranche was Rs 2,684 per gm.

The tenor will be eight years, with an exit option from fifth year, to be exercised on the interest payment dates.

The interest earned will be taxable and capital gains tax shall be levied as in the case of physical gold. The bonds can be bought by resident Indian entities, including individuals, Hindu undivided families, trusts, universities and charitable institutions.