Latika Sharma breathed a sigh of relief when she heard the Budget proposal of a gold monetisation scheme. “I have some old jewellery which I hardly wear, neither is my daughter interested. Now, at least I can deposit it in the bank and earn some interest,” she said.

The Budget proposed the government will introduce a gold monetisation scheme to replace the present gold deposit and gold metal loan schemes. According to industry experts, individuals can now deposit gold jewellery with banks for a nominal interest. The jewellery will be converted into gold bars, which jewellers can either buy or borrow from banks.

Rama Sampathkumar, a Government employee, was also thrilled. Her family has some ancestral jewellery it does not want to sell and which is lying idle. “Now, at least we can deposit with the bank and have it earn some money,” she said.

N Ananthapadmanabhan, Regional Chairman of All India Gems and Jewellery Trade Federation, and Managing Director of NAC Jewellers, says this will help cut down the gold import bill, “and more importantly, will make gold freely available for us”. He said the Federation expects at least 300 tonnes of gold to be deposited with banks in the first year of introduction. India imports 800-1,000 tonnes of gold every year. “So, to that extent the import bill will come down."

PR Somasundaram, Managing Director (India), World Gold Council, in a statement said today's announcements are a step towards making gold a part of the larger financial system. It is imperative to nurture the savings mindset reflected in gold accumulation, and use it to enhance savings, making it work for the economy.

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