Showing posts with label MONEY. Show all posts
Showing posts with label MONEY. Show all posts

Monday, August 17, 2020

Everything You Need to Know about India’s Gold Strategy

According to the World Gold Council (WGC), Indian households today hold the world's largest private stock of gold, a whooping reserve of almost 25,000 tonnes. With a total worth of approximately Rs 110 lakh crore, it is almost 40% of the country’s GDP. All of this value lies unused, locked away in private safes & lockers. Launched by the government in 2015, The Gold Monetisation Scheme (GMS) was aimed at converting this idle value into a productive asset for the country, as well as reducing the country’s dependence on import of gold.

Amidst the Covid-19 pandemic induced economic strain and the crash in gold imports, the government is now looking at further ways to tap into this reserve to aid the economic revival. Let us take a look at what the plans are:


The Issue :

According to the latest data from the Ministry of Commerce, the huge shortage of demand due to the Covid pandemic have caused gold imports into the country to plunge down to $79.14 million during just the first two months of 2020-21. Combined with domestic bullion prices reaching a record high, the gold demand for India in 2020 is expected to hit the lowest level it has been in 26 years, as predicted by the WGC.


The News :

In the light of the above, jewellers & bullion dealers have been approached by the government for strategies on how to tap India’s idle gold. Solutions proposed by the industry have been to align the present income tax law with the gold deposit schemes, raise the limits of gold holding labelled as 'Streedhan', slight modifications to the GMS in order to make it more lucrative, and to afford local refineries greater flexibility to help them scale up as part of a broader gold policy.


The GMS Situation :

The primary objective of the GMS was not only making the existing gold schemes more effective, but also broadening the scope for mobilising household held gold and putting them into productive use. However, being only able to garner deposits of a paltry 20 tonnes of gold till now, the existing GMS seems to have fallen short of its objective so far.


Jewelers and market analysts attribute this effect to reluctance & fears. Since households accumulate gold over the years, the older documents for the purchase may no longer be available even if these purchases are legitimate. This has given rise to fears of being questioned by the tax department, and a reluctance to participate in the deposit schemes. 


GMS 2.0 Advantage :

The revamped GMS provides a number of benefits to gold investors. Under the scheme, they can make term deposits of their idle gold, which safeguards their gold, as well as provides interest returns. Since the gold is deposited in GMS, investors save storage costs on physical safekeeping of their precious metal, while also benefiting from the capital appreciation and interest accumulated over time. Additionally, this gold deposit can be in any form they choose — whether it be jewelry, coins, or gold bars, and during redemption, the depositor can opt to take either cash or gold against their investment.


Possibly the most lucrative benefit is that the interest earned by investors on the gold deposited shall be exempted from tax. Thus, investors can earn up to 2.25% pa in case of medium and long-term deposits.


Industry Proposals :

In various discussions with the government, key industry players have proposed the following modifications to revamp the GMS:


  • Income Tax Benefits :

The Gem & Jewellery Export Promotion Council (GJEPC) proposes linking the GMS with the Income Tax Act which according to a 2016 directive states that even if they do not appear to tally prima facie with the income record of an assessee, the following amounts of gold jewelry in a household shall not be seized :


  • Up to 500 grams per married woman

  • Up to 250 grams per unmarried woman

  • Up to 100 grams per male member


The industry also believes that these limits, fixed in 1994, need to be revised to 1 kg, 500 grams, and 200 grams, respectively.


  • Added Flexibility

Another issue flagged was that although the existing gold deposit scheme allows customers to deposit their idle gold for earning interest, there is a lack of flexibility. Industry sources indicate that they want the deposit certificates under GMS to be made tradable in demat form with tracking mechanisms aimed to give these deposit certificates the added feature of liquid assets. The minimum deposit has also been requested to be revised to 10 grams instead of the present minimum 30 grams.


Additionally, the industry has requested a more effective scheme to fit in with the existing regulations on gold import, declaration and taxability of income and wealth, and prevention of money laundering, instead of a plain amnesty window as is the case now.


  • Gold Account Incentive

Record low imports of bullion and dore bars (a semi-pure gold alloy) have led gold refiners to recycle scrap jewelry to meet the current physical gold demand. In this scenario, incentivising the GMS by the government for banks and allowing the opening of gold metal accounts can go a long way in meeting the country’s need for new gold by procuring & recycling old gold from domestic holdings, according to James Jose, MD, CGR Metalloys.


The Ministry of Commerce and Exports is also working on a strategy to enable delivery of locally refined gold via its Futures and Options contracts.


  • Refinery Project Encouragement :

Nearly 40% of the total gold imports of the country is in dore form by refiners, while finished gold imports by banks make up the rest. Dore import licenses are held by 15 out of the 29 refineries. The industry had, in the past, proposed the government to encourage large greenfield refinery projects like UAE and China to allow the export of refined gold from India. If banks are allowed to purchase ‘Indian good delivery’ bullion from BIS certified gold refineries in India instead of from those abroad, it will encourage households & jewellers to sell more gold to the local refineries, and together, this can reduce the need for import of gold. 


  • Higher Rates of Interest :

Depositors now face a loss of nearly 7-14% of the principal amount as well as the interest Counting the making charges & process loss. Apart from the visible reluctance of Indian households to part with their family jewellery, this has been another clear reason for the gold deposit scheme to languish. A higher interest rate on the gold deposited has been proposed  as a way to compensate for this loss.


The new and improved GMS is set to be developed by the Government of India after taking all these suggestions into consideration. With gold prices set to hit a record high in the current fiscal year, this is the right time to consider taking out your idle gold from bank lockers & putting them into the new gold deposit scheme, so that your precious metal can give you greater returns than ever.


Thursday, September 1, 2011

Your Money Matters: Let's Do Money Work For You


Investment and saving money, nothing more than to restore the future welfare of the future with all the luxury and the good performance of current investments. The need to plan today, and know the power of their own money.

There are different varieties of investments available in the market with a choice of rapid investment, including investment in cash, debt securities, stock trading, mutual funds, derivatives, commodities, and real estate. One needs to know the importance of investment and the risks involved with it . In the short term and the election of long-term investment makes a good difference to meet the needs of an investment.

Here is 6 valuable options to put your hard money to grow

1. Fixed deposit : FD is a safest way to grow money, unfortunately it is the slowest but one can make double of his investment in 10-12 yrs ( depend on % of return given by banks or financial institutes)

2.Certificates of Deposit (CD’s) : This is almost similar to FD except the % of return, here one get higher yield of return compare to FD.It is also a slow process

3. Investing in stocks or mutual funds : the security and mutual funds are a great way to not only make money but to learn to invest. The immediate problem is that if you invest only $ 100, you'll pay at least 5% fee just to trade. The return on investment is exponential, especially if you play in penny stocks, only to have $ 100 means you probably will not gain much.

4. Commodities : If you were smart enough to know that the economy is going to tank and decided to buy things like gold, then the $ 100 now have tripled. Commodities are things like water, oil and gold, and usually when things go wrong, things go well because they are in high demand. In precious metals, you can actually buy instead of investing in them and people always like to look shiny things!

5. Forex : Billions of dollars are invested every day in currency trading and Forex allows investors to bet against each other. $ 100 can buy many other countries, currency, but decided to play the foreign exchange market should only be decided after thousands of hours of research have been put in. time zones allow you to shop around the clock.

6. Treasuries are safe : Treasury bills issued by the U.S. government and is regarded as very low risk investments. They are fully guaranteed by the government. You can choose the date when the investment is fully realized. In the short term treasury bills are the safest investments with maturities of 13 or 26 weeks.

Tuesday, June 14, 2011

Dinar Investment – A Swift Money-Making Alternative



With the progress of time, plenty of investment options have been introduced so that investors can make good money in quick time. After the initiation of Iraqi dinars in the global financial markets, investors are doing good business with Iraqi dinar investment and therefore considering it a lucrative money-making option. In today’s world, all sorts of business transactions and dealings are done via online. You don’t need to run aimlessly to and fro to catch hold of an Iraqi dinar. Several websites can help you hire a dinar dealer and you can smoothly conduct your business online. However, one going for Iraqi dinar investment should be aware of all the aspects of online dealings.

Prior to choosing an Iraqi dinar dealer online, one should be extremely cautious. There are plenty of fake dealers who might try to dupe you by offering attractive schemes. So, here a few points that can help you identify a trustworthy Iraqi dinar investment dealer:

Since the currency belongs to Iraq, every investor must first confirm the economic and political conditions of the nation and accordingly decide to go for the option.

Keeping track of the Iraqi dinar market is a must. One must be aware of the fluctuations in the currency exchange market.

Browse the Internet and get information on the present interest rates for exchanging Iraqi dinars. If you wish, you can talk to currency dealing experts.

Plenty of new dinars have been introduced and therefore it’s vital to know all their security features. This can help you realize whether the dealer with which you are working is honest or not.

Make sure that your Iraqi dinar investment dealer is registered with Better Business Bureau and US Treasury Department. You can also ask them to show documentary proofs. Remember, it’s better if your dealer both buys and sells dinar notes.

Friday, April 22, 2011

Smart Money Investing: 5 smart way to plan for happy retirement


Before deciding to invest money, one must put aside their daily and monthly expenditure. Once necessary expenses are taken care of, one has to decide what the best way and place for them to invest their hard earned money. Only a percentage of The monthly income should go investments. Simply words, the amount spent on long-term investment or short should not affect your daily life or liquidity.

There are 5 ways to invest more effectively and grow your money hard

1. Saving money in the bank: Savings Bank is not the best way to invest, but can provide security and flexibility.I guess that deposited $ 500 per month, keep doubling your balance every month including interest each time you deposit amount.so coming maintain deposit a certain amount on a monthly basis for a lump sum after a certain year or at the time of retirement

2. Bonds: Bonds is also a type of investment that banks and some private companies provide to customers to increase funding is to run trouble-free operation. one can get a higher interest rate compared to savings accounts. Your risk is completely Free or low risk investment As you know before investing the sum of the amount you get after a specified period

3. certificate of deposit: Banks also offer certificate of deposit deposit. Certificate almost similar to bonds.Here you can get a lower interest rate compared to bonds, but higher than savings account.According to the risk factors that have low risk compared to investing in bonds

4 . Insurance: There are many reasons for putting hard-earned money on insurance.someone put there hard earned money to deal with uncertainty in life and someone put as a means of investment.Today most insurance companies offer high return at maturity, as well as life cover guaranteed .so insurance is also a good platform to grow your money, but try to keep attention on the maximum life coverage instead of returning after maturity.


5. Stock market : stock market is an avenue of making quick money with the participation of high risk.You can buy shares of any business as an investment in that company.Returns depends on the performance of stocks in the market.
suppose purchase of 100 units of a deposit of $ 100 each i.e its total investment is $ 10000.After some time if the stock price reaches $ 120 which means that their stand worth the investment return of $ 12,000 or 20% of your investment, 
So for best performance should invest for the long horizon.