Comprehensive policy in the works to increase gold's glitter as an asset class

9 | India - 618.17 (Image source: moneycontrol)

The government’s policy think tank National Institution for Transforming India (NITI) Aayog will convene a meeting on Friday to prepare an action plan for a comprehensive policy on gold.

A panel, comprising top government officials from NITI Aayog, finance ministry, commerce ministry, mines ministry, the Reserve Bank of India and department of consumer affairs, will meet to formulate a strategy to develop gold as an asset class, as announced by Finance Minister Arun Jaitley in the Union Budget, 2018.

NITI Aayog member Ratan Watal had in February submitted a report titled ‘Transforming India’s gold market’ comprising 84 recommendations to the government.

In the upcoming meeting, the officials from various departments will look at the feasibility of implementation of these proposals.

For instance, commerce ministry has already formed a panel comprising officials from Directorate General of Foreign Trade (DGFT) and will discuss the implementation of 34 out of the 84 recommendations chalked out by NITI Aayog.

Similarly, consumer affairs ministry will look into areas such as ensuring and maintaining certain quality by hallmarking gold jewellery, a a senior government official said.

Mines ministry would need to simplify auction process for gold mines to enable more domestic as well as global mining giants investing into the sector.

“Every department/ministry is expected to form a sub-committee to focus on the proposals mentioned in the draft policy prepared by NITI Aayog,” the official said.

Apart from setting up a gold board with statutory powers, reducing the import duty on gold from 10 percent to a lower rate such as 5 percent, the recommendations include importing gold dore — semi-pure alloy of gold — and giving incentives for refining the yellow metal and making gold monetisation scheme more attractive are some of the recommendations of the report.

According to IBEF, Indian gems and jewellery sector is one of the largest in the world, contributing around 29 percent to the global jewellery consumption, with the country being the second-biggest user of the yellow metal. The sector boasts of over 4.64 million employees and is home to more than 300,000 gems and jewellery players.