How to Make the Gold Monetisation Scheme Successful

29 Pages Posted: 11 Jan 2017 Last revised: 9 Feb 2017

See all articles by Charan Singh

Charan Singh

Indian Institute of Management (IIMB), Bangalore

Amrutha Das

Indian Institute of Management (IIMB), Bangalore

Chaitanya Kansal

Indian Institute of Management (IIMB), Bangalore

Pallavi Kamath

Indian Institute of Management (IIMB), Bangalore

Rinusha Rajan

Indian Institute of Management (IIMB), Bangalore

Date Written: January 10, 2017

Abstract

Since times immemorial, India has been a leading consumer of gold in the world with an ever-increasing demand for the metal. However, due to a shortage of domestic gold, the country has largely been dependent on gold imports to meet this demand, resulting in large current account deficits. In 2015, the Government launched the Gold Monetisation Scheme (GMS), a substantial modification of the erstwhile Gold Deposit Scheme and Gold Metal Loan Scheme to mobilise gold in Indian households and historical gold reserves lying with religious institutions like temples. Nevertheless, Government sources confirm that only 3.1 tonnes have been mobilised successfully under GMS until July 2016, which is abysmally low compared to the amount of gold estimated to be lying idle in households. Through a literature survey, field visits and structured interviews with multiple stakeholders, this study attempts to identify and analyse the challenges that inhibit the scheme from realising its full potential. The study concludes with recommendations to enhance adoption of the scheme by both households and temples.

Keywords: gold, gold monetization schemes, temple gold, tapping household gold

Suggested Citation

Singh, Charan and Das, Amrutha and Kansal, Chaitanya and Kamath, Pallavi and Rajan, Rinusha, How to Make the Gold Monetisation Scheme Successful (January 10, 2017). IIM Bangalore Research Paper No. 534, Available at SSRN: https://ssrn.com/abstract=2896586 or http://dx.doi.org/10.2139/ssrn.2896586

Charan Singh (Contact Author)

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India
080-26993818 (Phone)

Amrutha Das

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

Chaitanya Kansal

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

Pallavi Kamath

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

Rinusha Rajan

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

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