Finance Ministry gives approval to set up a board to bring out a comprehensive gold policy

The Finance Ministry has finally agreed to form the long-pending precious metals’ board that will be tasked to bring out an integrated gold policy.

"The government held a meeting with officials and industry stakeholders where the plan to set up the board was finalised. A proposal on the same has been sent to the Prime Minister's Office," a senior government official told Moneycontrol.

The board will regulate gold, silver, platinum, palladium and various other commodities that the government notifies.

The plan to form such a board has been under consideration for quite some time now. The board will be headed by a Chairman, two whole-time members, two part-time members from the Finance Ministry and one member each from the Securities and Exchange Board of India, the Commerce Ministry and the warehouse regulator, the official said.

In February, Finance Minister Arun Jaitley announced formulation of a comprehensive gold policy to develop gold as an asset class.

NITI Aayog in August had suggested the government should bring down import duty on gold from the existing 10 percent and also asked to slash the Goods and Services Tax rate on the precious metal from the current 3 percent. It also recommended to review and revamp the gold monetisation and the sovereign gold bond schemes, besides setting up a gold board and bullion exchanges across the country to have greater financialisation of the yellow metal.

NITI Aayog had also suggested an exemption of 3 percent integrated goods and service tax to be paid by exporters in line with customs duty with a provision of bank guarantee.

"The board will need to be formed in a constitutional way through Parliament. That’s possible only post-elections now. There is also a possibility to make a stop gap arrangement wherein the board might function as part of the finance ministry," the official said.