The finance ministry is understood to be working on a series of schemes to harness household savings, two officials familiar with the development said. The departments of economic affairs and financial services are understood to be examining the issue.
“Over $50 billion is invested by Indians in gold annually. Now that the appetite for gold has been restricted, we need to look into other avenues that can be opened for investors,” said an official.
While the Reserve Bank of India is already in the midst of issuing inflation-indexed bonds for retail investors, other options on the table could include a gold deposit scheme.
“The idea is to not only fill the immediate investment gap for gold but also to provide long term options to investors that are attractive,” said another official close to the development.
RBI Governor Raghuram Rajan in his maiden press conference, after assuming charge, had announced that the central bank would launch inflation-indexed savings certificates linked to the CPI new index to retail investors by the end of November. Similar bonds, linked to the whole sale price index was introduced for institutional investors in June.
The matter, however, has gained traction in recent weeks after official data revealed that the economy grew at an estimated 4.4 per cent in the first quarter of this fiscal. More worryingly, gross fixed capital formation dipped by 1.81 per cent in the quarter as against a dip of 2.23 per cent in the same period a year ago.
“For growth to revive, we need to come back to higher savings and investments,” the official said.