What is/are the purpose/purposes of Government's 'Sovereign Gold Bond Scheme' and 'Gold Monetization Scheme'? 1. To bring the idle gold lying with Indian households into the economy 2. To promote FDI in the gold and jewellery sector 3. To reduce India's dependence on gold imports Select the correct answer using the code given below.
- (a) 1 only
- (b) 2 and 3 only
- (c) 1 and 3 only ✓ UPSC's answer
- (d) 1, 2 and 3
Why the answer is (c)
• The Gold Monetisation Scheme (2015) lets households and temples deposit idle gold with banks to earn interest, bringing an estimated 20,000+ tonnes of private gold into productive use (statement 1).
• Sovereign Gold Bonds offer a paper alternative to buying physical gold, and both schemes aim to cut India's gold imports, the second-largest item in its import bill and a drag on the current account (statement 3).
• Promoting FDI in jewellery (2) is not an objective of either scheme.
• Hence 1 and 3 only, option (c).
Why the other options are wrong
- (a) 1 only
- Reducing gold imports is also an objective.
- (b) 2 and 3 only
- FDI promotion is not an objective; mobilising idle gold is.
- (d) 1, 2 and 3
- FDI promotion is not an objective.
Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2016, held on 7 August 2016. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.