Buying gold has become increasingly difficult for the common man due to the daily rise in prices.
This has caused concern among people who are struggling to afford it. In addition, the government is planning a decision that will directly affect the general public.
The Sovereign Gold Bond (SGB) Scheme
The scheme in question is the Sovereign Gold Bond (SGB) Scheme, launched by the central government in 2015.
Its main goal was to provide affordable gold to the common people at rates lower than the market price.
The scheme also aimed to reduce the purchase of physical gold and promote investment in digital gold.
However, during a media interaction on February 1, after the budget, Finance Minister Nirmala Sitharaman revealed that the government is considering shutting down this scheme.
She explained that the rising interest on borrowings under this scheme is becoming a financial burden for the government.
Benefits for Investors
Despite the increasing financial cost for the government, the SGB scheme had been providing significant returns to investors.
In recent years, investors had received returns of up to 160%. However, due to its rising cost, it has become difficult for the government to continue supporting this scheme.
Future Investment Options
While the government plans to discontinue the Sovereign Gold Bond, it is exploring other investment options, including gold ETFs (exchange-traded funds) and other financial products.
These alternatives offer a simple and safe way to invest in gold. Additionally, the government may implement measures to control gold imports, helping to stabilize domestic gold prices.
