The Indian government is exploring a new scheme to mobilise idle gold by involving jewellers as primary collection points, offering interest to depositors.

  • Government is in talks with jewellers to act as gold collection partners.
  • Depositors will earn interest on the value of physical gold deposited.
  • Scheme will utilize demat accounts for seamless tracking.
  • Could potentially unlock nearly $400 billion in domestic gold.

In a strategic move to mobilise the vast amounts of idle gold held by Indian households, the government is in advanced discussions with major jewellers to introduce a new monetisation scheme. Unlike previous iterations, this proposal aims to leverage the existing trust networks between families and their local jewellers.

The Proposed Framework

Under this proposed scheme, citizens can visit their nearest jeweller to deposit physical gold, including jewellery, coins, and bars. A significant technical shift in this proposal is the integration of demat accounts; the gold deposit will be reflected digitally, similar to how stocks are held. This ensures transparency and ease of transaction for the modern investor.

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Rajesh Rokde, Chairman of the All India Gems and Jewellery Domestic Council, stated that the government is serious about the proposal and intends to implement it swiftly. The move seeks to address the friction points seen in the 2015 scheme, where the requirement to visit banks or testing centres discouraged mass participation.

Why This Matters

BozokMedia analysis shows that this move could be a massive catalyst for India's economic growth. By converting 'frozen' household assets into liquid capital, the government can significantly bolster the nation's investment capacity. Nilesh Shah, MD of Kotak Mahindra AMC, highlighted that monetising even 10% of India's gold could yield approximately $400 billion.

This gold would be equivalent to five years of FDI flows, providing a massive cushion for the economy.

With the exchange rate under pressure due to rising fuel prices and high gold imports, this scheme could turn India into a trade account surplus nation by reducing the need for physical gold imports.

Historical Context: Why the Shift?

The 2015 Gold Monetisation Scheme faced challenges in mobilisation, capturing only 38 tonnes of gold by March 2025. The primary hurdle was the lack of comfort in dealing with banks for gold transactions. By shifting the collection point to jewellers, the government is tapping into a pre-established ecosystem of trust and convenience.

Did You Know?: Experts estimate that Indian households hold upwards of 20,000 tonnes of gold, a massive untapped economic resource.

Frequently Asked Questions

1. Will I be able to track my gold easily?
Yes, the scheme proposes using demat accounts to reflect your gold holdings digitally.

2. What types of gold can be deposited?
In addition to traditional jewellery, the scheme is expected to include gold coins and bars to widen its reach.