There was a time when the then Union Finance Minister Arun Jaitley had issued the Sovereign Gold Bond with great fanfare. The government had left no stone unturned to make it attractive for common investors. But today this scheme seems to have become a headache for the government. That is why not even a single installment of it has come this year.
More than half of the current financial year has passed. But not a single installment of Sovereign Gold Bond has come yet. Even its installment did not come on Diwali and Dhanteras. Now the officials of the Union Finance Ministry have started saying that this is an expensive tool to raise money. Hindu Business Line has published a report about this.
Sovereign Gold Bond is awaited
The sovereign gold bond that was once introduced with great enthusiasm has become a headache for the government. That is why not even a single installment has been paid during the current year. Not even on Diwali and Dhanteras. When senior officials of the Union Finance Ministry are asked about this, they avoid the topic instead of saying anything. The bond that matured recently has given investors a whopping 159 percent return.
SGB returns are an eye-opener for people
The government had brought the third issue of Sovereign Gold Bond (SGB 2016-17 Series III) in the year 2026-17. It was issued on 17 November 2026. Its maturity took place on 16 November. Those who redeemed the bond on this day have made a huge profit of 159 percent. That means in the year 2016, its issue price per gram was Rs 3007. On redeeming it, investors got Rs 7,788 per gram. That means a profit of Rs 4,781 per gram.
Will SGB come this year?
Will SGB be introduced this year? On this question, a senior official of the Finance Ministry says that it is proving to be a very expensive tool to raise funds. Because of this, there is no mention of SGB in the borrowing calendar released for the second half of the current financial year. That official says that this is not a social security scheme that it should be launched at all.
When was the last installment released?
The last tranche of SGB (FY 2023-24 Series IV) was issued on 21 February. A total of Rs 27,031 crore (44.34 tonnes) was raised from this bond during the year 2023-24. This scheme was started in November 2015. Since then, a total of 67 tranches have come so far. Through these, the government has so far raised a total of Rs 72,274 crore (146.96 tonnes).
How is the price decided
There is a fixed standard for determining the price of Sovereign Gold Bond. Its price is determined by Bullion and Jewelers Association Limited on the basis of simple average of three days' value of 999 purity gold. In this scheme, not only the market price of gold is received on maturity, but on investing, 2.5 percent annual interest is also being given. This amount of interest is given on the basis of every 6 months. This is becoming a big problem for the government.
Gold bonds were cut in the budget
When the central government presented this year's budget, it was cut down. It was indicated that now fewer gold bonds will be issued than before. Now even government officials have started accepting tacitly that this is an expensive tool to raise money.