Union Minister Piyush Goyal on Wednesday sought suggestions from the jewellery industry to improve the Gold Monetisation Scheme to unlock the large pool of the yellow metal lying idle with households.
Addressing an awards function organised by the Gems and Jewellery Export Promotion Council here, commerce minister said unlocking of idle gold will help in reducing the burden on foreign exchange reserves.
In 2015, the government had launched the Gold Monetisation Scheme to mobilise the yellow metal held by households and institutions in the country.
However, the scheme has failed to evoke good response from individuals because of lower returns and security concerns.
Under the scheme, banks' customers are allowed to deposit their idle gold for a fixed period in return for interest in the range of 2.25-2.50 per cent.
"I think there are large amount of gold that is lying in people's lockers without any use. It is an unproductive asset which neither gives the person any return nor helps the economy. I would like you all to help us create a scheme by which we can truly attract people to come and deposit their gold," Goyal said.
The aim should be to encourage people to deposit their idle gold and earn income from it without losing ownership of the yellow metal. They should keep gold like a fixed deposit and enjoy both appreciation of the gold value and some reasonable return on the deposit, he said.
The minister asked the industry to share lacunaes in the existing scheme and suggest ways to improve it, he added.
Stating that unlocking idle gold under the scheme will reduce burden on the foreign exchanges reserves, the minister said India continues to import large quantities of the yellow metal and unlocking idle gold will reduce the import dependence.
India's annual gold demand is 800-1,000 tonnes and much of it is imported. It is estimated that about 20,000 tonnes of gold is lying idle with households.
On banks' lending to gems and jewellery sector, Goyal said his ministry will soon approach the Union Cabinet seeking approval for the NIRVIK scheme (Niryat Rin Vikas Yojana) under which the government proposes to subsidise the premium that has to be paid by the large gems and jewellery exporters.
On the industry's concerns about special economic zones (SEZs), Goyal said the issues will be addressed with the finance ministry soon.
"We are trying to see if they can sort out the utilisation of unused areas. I believe many SEZs either have built up area or even plots of land which are unused and with the sunset clause coming in on March 31, 2020 there could be a situation where unused infrastructure may not be able to really attract SEZ units to come in and operate out of these areas.
"In such a situation I would like you all also to study and guide us what kind of a formula or format can be created so that such unused areas can be used by the domestic industry," he added.
The minister also mentioned that setting up of jewellery parks could be looked at.
He also urged the gems and jewellery industry to look at establishment of more skilling centres to create better trained manpower for the sector.