Modi Government Plans Major Gold Monetisation Push: Can India Unlock Rs200 Lakh Crore Worth of Idle Gold?
- Ajjay Bhagyakar
- May 14
- 3 min read
India may soon witness a major transformation in how household gold is used and managed. According to recent reports and discussions emerging from government and industry circles, the Modi Government is planning a fresh push for a revamped Gold Monetisation Scheme (GMS), aimed at reducing the country’s massive dependence on gold imports while unlocking the economic value of idle gold lying in Indian homes.
India is one of the world’s largest consumers of gold, importing over 700 tonnes annually. At the same time, Indian households and temples are estimated to hold nearly 25,000 to 30,000 tonnes of gold — much of it lying unused in lockers and vaults, Modi Government Plans Major Gold Monetisation Push: Can India Unlock Rs200 Lakh Crore Worth of Idle Gold?
What Is the New Gold Monetisation Proposal?
Under the proposed plan, citizens may soon be able to deposit physical gold in banks and earn interest on it — similar to how savings accounts work. Reports suggest banks could accept deposits starting from as little as 10 grams of gold, making the scheme more accessible for middle-class families and small investors.
The deposited gold would then be refined and circulated back into the economy through jewellers, manufacturers, and exporters. This could help reduce India’s dependency on imported gold and lower pressure on foreign exchange reserves.
According to industry estimates, if even 2,000 tonnes of household gold enters the formal banking system, India may not need to import gold for nearly three years.
Why Is This Important for India?
Gold imports significantly impact India’s trade deficit and foreign exchange outflow. Every year, billions of dollars leave the country to purchase gold from international markets. With global uncertainties and rising gold prices, reducing imports has become a strategic economic priority.
The government’s broader vision appears to focus on:
Reducing gold imports
Strengthening the Indian Rupee
Improving forex reserves
Bringing idle assets into productive economic use
Supporting jewellers with domestic gold supply
Industry leaders and jewellery associations have also supported the move, suggesting reforms that could improve public trust and participation in the scheme.
Why Earlier Gold Monetisation Schemes Struggled
India had introduced the Gold Monetisation Scheme earlier in 2015 alongside Sovereign Gold Bonds. However, the scheme saw limited success due to several challenges:
Low public awareness
Emotional attachment to family jewellery
Concerns regarding purity testing and melting
Lack of trust in the process
Limited banking participation
As a result, only a small portion of household gold entered the formal system.
This time, policymakers and industry experts are discussing simpler processes, better incentives, digital tracking, and wider jeweller participation to make the scheme more practical and attractive.
A Potential Game-Changer for the Economy
If implemented effectively, the revamped Gold Monetisation Scheme could become one of India’s most significant financial reforms in the precious metals sector. Instead of gold sitting idle in lockers, it could become an active economic asset generating liquidity, reducing imports, and strengthening domestic manufacturing.
The move also aligns with the government’s larger vision of economic self-reliance and smarter utilisation of national wealth.
However, success will largely depend on public confidence, transparency, ease of participation, and the incentives offered to depositors.
Final Thoughts Modi Government Plans Major Gold Monetisation Push: Can India Unlock Rs200 Lakh Crore Worth of Idle Gold?
Gold has always held emotional and cultural value in Indian households. But now, policymakers are looking at gold not just as jewellery or savings — but as a powerful economic resource.
If the new monetisation push succeeds, India could unlock trillions of rupees worth of dormant wealth while significantly reducing dependence on imports. The coming months will reveal whether this ambitious initiative can truly reshape India’s relationship with gold.
Author: Ajjay Bhagyakar
Published By: Griha Realty
Source: X ( Dainik Jagran ) – The Analyzer
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