Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
5) The government of India recently launched a Sovereign Gold Scheme to provide an alternate option when it comes to owning gold. Discuss. (250 words)
Why this question
Sovereign Gold bond scheme is an important scheme of the government of India, given that India is one of the biggest importers of the Gold. In this context it is important to discuss the scheme in detail.
Discuss- this is an all-encompassing directive which mandates us to write in detail about the key demand of the question. we also have to discuss about the related and important aspects of the question in order to bring out a complete picture of the issue in hand.
Key demand of the question.
The question wants us to write in detail about the Sovereign Gold Bond Scheme and its salient provisions.
Structure of the answer
Introduction– write a few introductory lines about the Sovereign Gold Bond Scheme. E.g The scheme aims to reduce the demand for physical gold, thereby keeping a tab on gold imports and utilising resources effectively. With the RBI issuing these gold bonds, it brings in transparency and trust, providing an avenue wherein people can own gold without having to worry about its storage or safety.
Discuss about the scheme further in detail. E.g
- How the scheme operates- Under the Sovereign Gold Bond Scheme, the Reserve Bank of India will issue the bonds on behalf of the Government of India. The bonds will be sold at post offices and banks and issued in denomination of gram. They will issue these bonds on payment of money. Later on, the bonds will be connected to the price of gold. Investors have to pay the bond price in cash. From one person, the Sovereign Gold Bond Scheme would accept a minimum investment of 2 gm gold and a maximum investment of 500 gm in a single fiscal year. The bonds will pay a yearly interest of 2.75% to investors etc.
- Discuss the eligibility for applying, any risks involved and other such important provisions of the scheme.
Conclusion– based on your discussion, form a fair and a balanced conclusion on the given issue. Bring out the importance of the scheme in reducing Gold imports, mobilization of resources etc.