The GSAS will help people fulfil their wish of purchasing gold, but the gold will be in the banking system instead of the existing practice of keeping it in homes.

 

After the huge success of the Pradhan Mantri Jan-Dhan Yojana (PMJDY), the Centre is planning to launch the Gold Savings Account Scheme (GSAS). Sources said that the proposal for launching the scheme has come from the NITI Aayog.

“Last month, the NITI Aayog had recommended to the government to bring the Gold Savings Account Scheme for every citizen. Following the recommendation, the Ministry of Finance has asked the NITI Aayog to come up with a draft design of the scheme,” a source close to the NITI Ayaog told The Sunday Guardian.

“As per the proposal of the NITI Aayog, the GSAS will have features similar to that of a savings account. However, in GSAS, consumers will deposit their cash and the cash will be counted as an amount of gold. Whenever a consumer deposits money in his/her account, the passbook will show the quantity of gold instead of cash. At the time of withdrawal, the consumer will be given an option to withdraw or transfer either cash or the gold equivalent,” the same source cited above said.

The source added: “The GSAS account will be opened in branches of banks just like any other common savings account. Similar to any other common savings account, interest will also be given on savings under the GSAS and no capital gains tax will be levied on interest accrued. The amount of gold will be calculated according to the market price on the day of cash deposit done by the consumer.”

According to experts, the GSAS proposal is intended to prevent the habit of accumulating gold in homes. The GSAS will help people fulfil their wish of purchasing gold, but the gold will be in the banking system instead of the existing practice of keeping it in homes.

Explaining the operation of the GSAS, Amit Kumar, a Delhi-based chartered accountant said, “The proposed plan will curb the habit of accumulating gold in homes and it will also promote the banking system. Import of gold is causing much damage to the country. Gold import has widened the country’s current account deficit and the proposed GSAS might change the existing scenario.”

“According to the World Gold Council, India’s gold demand was 737.5 tonnes in 2017; most of the purchase of gold in India happens in physical form and that is hurting the Indian economy. If the proposed plan to launch the GSAS is successful, it will give a boost to the economy. The PMJDY has already become successful and for the first time, financial inclusion in the country has improved,” Kumar added.

The PMJDY, launched by the Narendra Modi government in 2014, currently has over 31 crore (318 million) bank accounts opened and over Rs 792 billion ($12 billion) deposited under the scheme. The PMJDY has expanded and provided affordable access to financial services such as bank accounts, remittances, credit, insurance and pensions to the common citizen of the country.

 

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