Draft gold deposit scheme out, sets 30 grams minimum limit
The government on Tuesday put in the public domain the draft guidelines for the much awaited, interest-bearing gold monetisation, or deposit scheme, for comments, proposing to put to productive use vast amounts of idle gold with households, and thereby cut its imports.
 
The objectives of the scheme, under which as little as 30 grams can be deposited, is three-fold: Mobilise the gold, give a fillip to the gems and jewellery sector by making gold available from banks on loan and reduce the reliance on imported gold and conserve foreign exchange.
 
"The minimum quantity of gold that a customer can bring in is proposed to be set at 30 grams, so that even small depositors are encouraged. Gold can be in any form, bullion or jewellery," the guidelines, said, adding the depositors can redeem the gold either in cash or in physical form.
 
The comments need to be furnished by June 2.
 
According to the World Gold Council, an estimated 22,000-23,000 tonnes of gold is lying idle with households and institutions in India. The annual imports amount to between 850-1,000 tonnes, valued at $35 billion to $45 billion.
 
In his budget speech on Feb 28, Finance Minister Arun Jaitley had said that the government will come up with two schemes for gold -- one on monetisation, or permitting gold deposits with banks for interest, and the other on redeemable gold sovereign bonds also with fixed interest.
 
"The new scheme will allow depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account. Banks and other dealers would also be able to monetise this gold," Jaitley had said.
 
As per the draft guidelines, the interest earned from the monetisation scheme will be exempt from income tax, wealth tax and capital gains tax to make it attractive for households. 
 
How the scheme will work: A person or institution holding gold can get it valued from any of the 350 hallmarking centres, then open a gold savings account with banks for a minimum period of one year and earn interest -- either in cash or gold units.
 
Interest on the gold savings account will be payable after every 30 or 60 days of the opening of the account. Banks will be free to decide the interest, and both the principal and interest will be valued in gold.
 
"Both directionally, and in terms of the content, this draft reflects a practical approach," said Somasundaram P.R., managing director for India with the World Gold Council. 
 
"Once the incentives fall into place to the satisfaction of banks, customers and others, we will own a 'Uniquely Indian' scheme that allows gold to become a dynamic, fungible asset in the hands of gold savers with significant benefits to the economy, and therefore provide the gold trade with consistent policies."
 
Under the draft guidelines, the charges for hallmarking have been proposed at Rs.500 per lot for melting up to 100 grams, going up to Rs.900 for between 900-1,000 grams. Then there is also the testing charge of Rs.300, while stone removing and melting loss is at actuals.
 
If the gold finds its way into the scheme, then the banks will bear the cost.
 
How do the banks benefit: To incentivise them, it is proposed to include the deposits under the cash reserve ratio requirements. Banks can also sell the deposits to generate foreign exchange, convert it into coins, use it on commodity exchanges and lend to jewellers.
 
The money made in the process, thus, can be used to pay the depositors, pay the fee charged by the hallmarking centres and retain the rest as profit. Banks can also fetch gold directly from the international markets to lend to jewellers.
 
Highlights of the scheme:
 
- Customers bring their idle gold, get it verified and melted, and are provided with a receipt.
 
- They open a gold savings account with a bank, show the receipt and the tenure starts.
 
- Verification centres prepare standard bars of gold, and inform banks about the value.
 
- Gold is then sent to a refinery and is deposited as bars in state-owned vaults.
 
- Jewellers approach banks for gold loans or for purchase of gold.
 
- Banks tell refinery to send the agreed amount of gold to jewellers.
 
- Upon maturity of loan, jewellers repay the banks in cash.
 
- Similarly, upon maturity, customers get back physical gold, cash or dematerialised gold.
 
- Banks extend interest to customers and make money by levying interest on gold loans.

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Enhanced NOIDA land compensation not precedent for future, says SC
The Supreme Court has said that the increased compensation of 64.7 percent coupled with allotment of developed land to the extent of 10 percent of the land acquired from each land owner in NOIDA and Greater NIOIDA would not be treated as a precedent for the award of such compensation for future acquisitions.
 
".. we make it clear that directions of the (Allahabad) high court are given in the a unique and peculiar/specific background and, therefore, it would not form precedent for future cases," said a bench of Chief Justice H.L.Dattu, Justice A.K.Sikri and Justice Arun Mishra in their reasoned judgment in respect of which brief orders were pronounced on May 14.
 
Though the operative part of the court's verdict was pronounced in the court on May 14 itself but the full judgment was made available only on Tuesday.
 
In the instant case the full bench of Allahabad High Court, by its order of October 21, 2011, while quashing the acquisition of land in 61 villages falling in Noida and Greater NOIDA, had allowed the NOIDA authority to continue to retain the acquired land instead of restoring ownership to the original land owners. They instead received 64.7 percent enhancement in compensations and farmers getting 10 percent of the developed land subject to a maximum of 2,500 square metres.
 
The apex court noted that farmers whose land was acquired for industrial purposes by invoking emergency provisions were not aggrieved by the manner that the acquisition was undertaken by the NOIDA authority, but a large portion of the land acquired was sought to be given away to the builders for development of the land as residential.
 
Referring to the earlier verdicts, it said that the argument of the farmers that giving away of the land to the private developers for construction of residential units gave them the fresh cause of action, "gets dented to a great extent".
 
Invoking the urgency clause, the NOIDA authority had in 2008 acquired 589.188 hectares of land in NOIDA and Greater NOIDA in Dadri sub-division) of Gautam Budha Nagar in Uttar Pradesh.
 
NOIDA authority had acquired land for industrial purposes but later it changed the land use in respect of a large chunk of it for residential purposes and gave it to builders.

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SC moved to know income, expenditures of political parties
The Association for Democratic Reforms (ADR) has moved the Supreme Court seeking directions to the Congress, the BJP, the CPI-M, the CPI, the NCP and the BSP to disclose the complete details of their income as well as expenditure.
 
The PIL by the ADR along with RTI activist Subhash Chandra Agrawal has also sought declaration that all the national and regional political parties are public authorities under the Right to Information Act, 2005 and were accountable under two orders of the Central Information Commissioner of June 2013 and March 2015.
 
Besides seeking the complete details of income and expenditure of the national and regional political outfits, the PIL has sought complete details of donations and funding received by them and the names of the donors making donations to them and to electoral trusts.
 
The Central Information Commission by its June 3, 2013 order had said that six political parties that included the Congress, the Bharatiya Janata Party, the Communist Party of India-Marxist, the Communist Party of India, the Nationalist Congress Party and the Bahujan Samaj Party were public authorities under the RTI and were obliged to disclose information sought under it.
 
In the PIL, the petitioners have sought to highlight the practice wherein political parties in power have a significant de facto control over legislatures and executive through their elected members.
 
It said that schedule 10 of the constitution makes it compulsory for the elected members of legislatures to toe the party line, failing which they stand to suffer disqualification from the membership of the legislatures either in parliament or state assemblies.
 
However, at the same time "important information about political parties, their income, expenditure, complete details of donors are not disclosed by political parties for public scrutiny", the PIL said describing disclosure of such information as the right of information of an average voter.
 
Contending that the political parties were integral to parliamentary democracy as it is they that form the government and run the governance, the PIL referred to the Law Commission's 170th report by which it had recommended transparency in the functioning of political parties specially focusing on their internal democracy, financial transparency and accountability in their working.

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