Fix gold bond scheme to save precious forex

By: |
Published: July 4, 2019 4:07:52 AM

While gold is fully liquid, buyers can redeem the bond with the government only after five years; they can sell the bond in the secondary market, but that hardly exists.

gold, gold bond, gold prices, gold bond scheme, commoditiesThe bonds are not available on tap, while gold is, so that’s a big negative. (Reuters)

While India needs to reduce imports of gold — $33 billion even now, and $57 billion in FY12 — its attempts to do so via a gold bond continue to fail as the scheme is badly designed. The bonds are not available on tap, while gold is, so that’s a big negative.

gold, gold bond, gold prices, gold bond scheme, commodities

Gold prices for each tranche are fixed at the average of the last three days — this means buyers lose out while selling if gold prices are rising. While gold is fully liquid, buyers can redeem the bond with the government only after five years; they can sell the bond in the secondary market, but that hardly exists.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.