25,000 tonnes of household gold, and schemes that keep failing

As per various estimates, #Indian #households are believed to hold over 25,000 tonnes of #Gold!
Yet, scheme after scheme launched by the #government to bring this Gold into the formal economy has struggled!
- Gold Monetization Scheme (#GMS) largely failed
- Sovereign Gold Bonds (#SGB) saw limited cultural acceptance
- Now, Electronic Gold Receipts (#EGR) is the latest avatar

Why do these Schemes fail?
Because policymakers look at Gold as a #FinancialAsset.
While for Indian households, Gold is Emotion, Security, and Family Legacy!
Many families have accumulated Gold over generations.
Some were bought during marriages, some inherited, and some purchased slowly through cash savings!
Expecting perfect invoices, purchase proofs, or #CapitalGains tracking for decades-old jewellery is simply unrealistic.

So what could actually work better?
Instead of another complicated scheme, India may need a limited-period Gold #Regularization & #Formalization Window!
Allow households to:
- Declare limited quantities of Gold
- Get purity assessed
- Convert physical holdings into Electronic Gold Receipts (EGRs)
And this should come without aggressive questioning about decades-old bills or historical capital gains!

If the government gives the Current generation a Clean slate with Clear rules, a meaningful amount of dormant Gold may actually enter the formal ecosystem.

#Safeguards should still exist to avoid misuse:
- Male member: say up to 100g
- Female member: say up to 250g
Beyond that, Normal compliance and scrutiny can apply!

The process also needs #Simplification
Most people don't like to run around different offices for Gold verification.
Instead, create mobile Gold assessment camps.
Exactly like branded jewellery stores evaluate Gold today.
People should be able to: Walk in, get purity tested, Digitize holdings, and complete the process within an hour!

The framework must clearly assure: No retrospective harassment or #taxation for limited disclosed holdings!

The mobilized Gold can: Reduce #imports, Support jewellers, Improve formal circulation, and Increase future tax compliance!

The current approach of increasing import duties may result in increased smuggling and push #cash transactions higher!

What is your take?
How can India realistically bring household Gold into active circulation?

#MoneyMinusNoise #PublicPolicy Narendra Modi #RBI #NSE

Pic Credits #MoneyControl