Are government gold monetisation schemes a hard sell?

The fourth tranche of Sovereign Gold Scheme numbers have started pouring in where BSE has collected 159 kilograms (KG) while NSE has seen higher interest at 341 KGs worth Rs 106 crore. While the exchanges have collected half a tonne of gold, the numbers from the banks and post offices are still awaited.

The last three tranches have seen investors buy near 4.9 tons gold. India has imported around 800-900 tons in recent years. Though this year, until time, Indian imports are approximately 200 tons and might end the year with just about 500-600 tons.

The Sovereign Gold bond (SGB) scheme was launched amidst a lot of road shows, media promotions and changes in its 4^th tranche. The minimum amount to invest was revised down to 1 gram to encourage participation from investors who wanted to own small denominations. SGB is paper gold. It is over and above the gold price. One stands to earn a fixed interest rate from it as well.

The collected number seems small in comparison to the work that the exchanges put across. NSE had introduced new initiatives like bid verification and bid withdrawal facilities for investors as also bulk upload facility similar to existing IPO bidding format. BSE in the meanwhile has assured to pass 1 percent commission to members to promote participation and even made the bidding session available overnight on BSE SGB platform.