Amid high volatility in prices and huge demand of gold in the country, jewellery retailers are demanding tapping of the yellow metal in the domestic market itself through bonds and gold deposits.
The retailers are also mulling putting a stop to selling of gold coins and gold bars to curtail investments made in gold, according to an official of trade body All India Gems and Jewellery Trade Federation.
"It is estimated that Indian houses hold close to 25,000 onnes of gold and at current gold price, it represents USD 1.25 trillion.
"The gold stock itself represents over 50 per cent of the economy. Even if 10 per cent of the gold savings are tapped, it would represent resources of Rs 7,00,000 crore or USD 125 billion," All India Gems and Jewellery Trade Federation Regional Chairman G Anantha Padmanabhan told PTI.
The government's directive to restrict supply of gold has led to a huge shortage of gold in the market and it has developed premiums on gold rates, he said.
To a query he said the Federation was holding talks with members and other associations to stop retailing gold coins and gold bars as investments which would further reduce use of gold by 10-15 per cent. "We hope it will be implemented by July 1," he said.
Stating rise in import duty on gold from one per cent in January 2012 to eight per cent in June 2013, he alleged it would lead to illegal imports of gold. "We suggest that certain licensed jewellers be allowed to attract gold from customers through bonds or schemes and deposit it with scheduled banks," he said.
"ETFs (Exchange Traded Funds) and Gold traded funds may be allowed to loan the idle gold stocks to channelise agencies which in turn be circulated in the manufacturing process of the gems and jewellery industry," he said.
"This will help reduce CAD (Current Account Deficit) and allow 50 per cent of ETF gold to be used for the Gem and Jewellery sector, reducing the double imports," he said.
The Reserve Bank should encourage gold deposit schemes from consumers to organised jewellers since it would increase the monetisation