PM Narendra Modi will launch the Gold Monetization Scheme (GMS) for the people of India on Thursday 5th, November 2015. Do you want to know the highlighted point or feature of this GMS scheme? The answer is its high interest rates in comparison with gold deposit schemes offered by banks.
In India, banks generally offer maximum 1% or lower interest rates on gold deposits or investments. Another key feature of GMS is that the minimum amount of deposit has also been set to much lower when compared to that of bank gold investment schemes.
In government Gold Investment scheme, a person can make a gold deposit of minimum 30 grams or higher. This implies that the GMS scheme is targeting the common House hold man of Indian countryside families, slums, bastis and villages. There are minimum 5 to 10 GMs. of gold lying unused in most of the Indian people's houses which can be invested for yielding dividends. But without good return guarantee, no man will come out to invest. Hence, the Modi government has offered a lucrative 2% to 2.5% in its Gold Monetization Scheme to fetch maximum gold investments from even the poorest people having some amount if gold, not just from temples, mathas and goldsmiths. For a common man, GMS can prove to be a jackpot provided the scheme does not lower its interest rates or modifies rules only for government's favor.
How will Gold Monetization Scheme (GMS) work?
A person seeking to invest in gold monetization scheme can take his amount of gold for a melting test to prove its originality. Eventually, he will be issued a certificate by his bank mentioning the rate of interest applicable to his preferred GMS tenure.
Please note that for 5 to 7 years tenured Gold Monetization schemes, people will get 2.25% interest and those having 10 to 12 years of investments in Gold Monetization scheme will get 2.5% interests. After maturity, the investor can claim his returns in the form of his original gold amount + interests earned. He can also take the total amount in the form of cash if he wants.
Will GMS be a hit success?
Like Pradhanmantri Jan Dhan Yojana, do you think PM Modi's Gold Monetization Scheme will be massively successful? Well, I don't think so. Simply because, people might try the 5 geared GMS investment in good numbers as the government might change in next general election polls in 2019 and GMS may or may not exist or simply change its attractive interest rates offered now. But there are less chances for 10 years or more tenured GMS investments. Because common people do have an urgency like daughter's wedding or children's study which can compel them for making a quick maturity of their gold monetization investments. So, I believe people will not response massively to the GMS scheme.
Secret tunnel for black money launderers
Since black money holders find it hard to make their ill-earned money tax free in the diem of cash, the Gold monetization scheme (GMS) can prove to be a boon for themselves. Because they turn their cash into gold after purchase and make investments in GMS by various names of their relatives, close friends and comrades and thus making their ill-got wealth legalised. Since no verification of purchase of gold is generally made in India, especially, for a common man who has the least amount of gold, GMS can create a havoc if black money launderers silently sneak in and snatch their opportunities without the knowledge of anyone.
In India, banks generally offer maximum 1% or lower interest rates on gold deposits or investments. Another key feature of GMS is that the minimum amount of deposit has also been set to much lower when compared to that of bank gold investment schemes.
In government Gold Investment scheme, a person can make a gold deposit of minimum 30 grams or higher. This implies that the GMS scheme is targeting the common House hold man of Indian countryside families, slums, bastis and villages. There are minimum 5 to 10 GMs. of gold lying unused in most of the Indian people's houses which can be invested for yielding dividends. But without good return guarantee, no man will come out to invest. Hence, the Modi government has offered a lucrative 2% to 2.5% in its Gold Monetization Scheme to fetch maximum gold investments from even the poorest people having some amount if gold, not just from temples, mathas and goldsmiths. For a common man, GMS can prove to be a jackpot provided the scheme does not lower its interest rates or modifies rules only for government's favor.
How will Gold Monetization Scheme (GMS) work?
A person seeking to invest in gold monetization scheme can take his amount of gold for a melting test to prove its originality. Eventually, he will be issued a certificate by his bank mentioning the rate of interest applicable to his preferred GMS tenure.
Please note that for 5 to 7 years tenured Gold Monetization schemes, people will get 2.25% interest and those having 10 to 12 years of investments in Gold Monetization scheme will get 2.5% interests. After maturity, the investor can claim his returns in the form of his original gold amount + interests earned. He can also take the total amount in the form of cash if he wants.
Will GMS be a hit success?
Like Pradhanmantri Jan Dhan Yojana, do you think PM Modi's Gold Monetization Scheme will be massively successful? Well, I don't think so. Simply because, people might try the 5 geared GMS investment in good numbers as the government might change in next general election polls in 2019 and GMS may or may not exist or simply change its attractive interest rates offered now. But there are less chances for 10 years or more tenured GMS investments. Because common people do have an urgency like daughter's wedding or children's study which can compel them for making a quick maturity of their gold monetization investments. So, I believe people will not response massively to the GMS scheme.
Secret tunnel for black money launderers
Since black money holders find it hard to make their ill-earned money tax free in the diem of cash, the Gold monetization scheme (GMS) can prove to be a boon for themselves. Because they turn their cash into gold after purchase and make investments in GMS by various names of their relatives, close friends and comrades and thus making their ill-got wealth legalised. Since no verification of purchase of gold is generally made in India, especially, for a common man who has the least amount of gold, GMS can create a havoc if black money launderers silently sneak in and snatch their opportunities without the knowledge of anyone.
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