The central government is likely to introduce a new version of the Gold Monetisation Scheme within the next two weeks, according to media reports.
The updated scheme could make it easier for people to deposit their gold and earn interest, while also helping reduce India’s dependence on gold imports.
One of the biggest changes could be that jewellers, along with banks, may be allowed to collect gold from the public.
Deposit Gold Through Jewellers
Under the proposed scheme, people may be able to deposit their gold with authorised jewellers, just as they use bank lockers. In return, they could earn an annual interest of up to 2.5% on the deposited gold.
Earlier, only banks were allowed to accept gold deposits. By including bullion traders and jewellers as collection partners, the government hopes to make the process more convenient and encourage more people to participate.
This move comes after Prime Minister Narendra Modi urged people to avoid buying gold for one year to help reduce imports.
Government Targets Over 1,000 Tonnes of Gold
The All India Jewellers and Goldsmiths Federation (AIJGF) believes that involving jewellers will significantly increase gold collection from households.
According to estimates, the government could collect more than 1,000 tonnes of gold under the new framework.
Reports also suggest that if just 5% of the gold held by Indian families is deposited, it could bring nearly $90 billion (around ₹8.57 lakh crore) into the economy.
This could reduce the need for gold imports for up to two years, lower demand for US dollars, and strengthen the Indian rupee.
India Holds Massive Gold Reserves
According to ASSOCHAM, Indian homes and temples together hold nearly 50,000 tonnes of gold, valued at around $10 trillion (about ₹830 lakh crore).
This is larger than the combined gold reserves of the world’s 10 biggest central banks. India’s private gold holdings are also bigger than the annual GDP of almost every country except the United States and China.
India is also the world’s second-largest gold consumer. During FY2026, the country imported an average of 60 tonnes of gold every month, worth nearly $6 billion (around ₹57,000 crore).
Why the Earlier Gold Scheme Didn’t Work
The original Gold Monetisation Scheme was launched in 2015 to reduce gold imports. People could deposit their gold with banks and earn annual interest between 2.25% and 2.5%.
However, the response was very poor.
Although Indian households were estimated to own around 25,000 tonnes of gold, only 38 tonnes were deposited under the scheme over a period of 10 years.
Due to low participation, the government later discontinued the medium and long-term deposit options.
Four Reasons Behind the Failure
Experts, including Bhavik Patel of Tradebulls Securities, have pointed out the main reasons why the earlier scheme failed:
High cost for the government: The government had to pay annual interest and also bear the impact of rising gold prices at maturity, leading to financial losses.
Emotional value of jewellery: Many families were unwilling to melt ancestral or traditional jewellery because of its sentimental, religious, and cultural importance.
Fear of tax scrutiny: People worried that depositing old gold could lead to questions about ownership, bills, or tax investigations.
Lack of interest from banks: Banks earned very little from the scheme, so they had little motivation to promote it or encourage customers to participate.
