World Gold Council has called upon the government to increase the supply of India Gold coins to encourage people to invest in the yellow metal.
At present, the coins are available only through MMTC outlets and select banks and its distribution should be accelerated by adding more features like buy-back arrangements in banks, P.R. Somasundram, Managing Director, India, WGC said.
Interacting with Business Line here on Friday, he said that a proper marketing strategy for India gold coins will propel the right kind of demand and will also resolve the problem of purity and melting loss while recycling the gold. The total recycled god in India in 2015 was 80.2 tonnes.
Moreover, the launching of gold coins will help temples to deposit gold in banks, as the devotees may prefer gold coin offerings instead of jewellery. However, India Gold coins are relatively a new product and it should take some time for the demand to pick up, he added.
Asked on the recent regulatory issues on gold purchase, he said, “gold is a savings products and its taxing is not right and it will be counter productive”. He suggested increasing transparency for gold trade by simplifying procedures and collection of reasonable taxes for a thriving business in the country.
Gold savings
He was also of the view that the gold savings should flow through the banking system for the benefit of the economy and it would encourage savings, promote financial inclusion, and leverage passion for gold. Given the fascination of the today’s youth towards electronic products, he said that the new generation should be attracted to gold investments with more features like gold accumulation benefits.
Somasundram suggested creating a road map by articulating a gold policy for India to enhance the value of gold for benefiting the country’s economy and the households. Gold Tourism is one such step to promote investments in gold by displaying the ancient temple jewellery for visitors to generate a good buying potential.
Quoting statistics, he said the gold demand last year had registered a marginal increase to 849 tonnes against 828 tonnes in 2014. In the fourth quarter, the demand grew by 6 per cent to 233 tonnes from 220 tonnes in the same period last year. In 2016, we anticipate that gold demand will be robust especially with the forecast of good monsoon, as it would lead to improvement in rural income.