5) If you want to buy gold as an investment, then you have an option.
Indians love gold and will continue to do so. The government knows it cannot fight that but can work around it.
A Sovereign Gold Bond will be introduced as an alternative to purchasing physical gold. The bond or financial instrument will carry a fixed rate of interest and when investors sell the bond they will get the value of the gold.
In such schemes, investors buying gold don't get the metal in physical form, as in the case of coins or bars. Instead, they get a paper or certificate issued by the government saying they bought a certain amount of gold.
So if you believe that gold prices will rise in the future, invest in gold bonds. When the price of gold goes up the value of the bond price also goes up by the same amount. Meanwhile, you continue to earn a fixed rate of interest.
Under the Gold Monetisation Scheme, depositors of gold can earn interest in their metal accounts and jewelers can obtain loans in their metal account. Banks and other dealers would also be able to monetise this gold. This will help mobilise idle gold in the country and put it into productive use since it has the potential to translate gold savings into economic investments.