PIB Summary- 17th June, 2022 | PIB (Press Information Bureau) Summary - UPSC PDF Download

Soverign Gold Bond Scheme

Why in News?
The Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds in tranches

About Soverign Gold Bond Scheme (SGB)

• The Sovereign Gold Bond Scheme was introduced in the Union Budget 2015-16 by the Union Cabinet which was chaired by PM Narendra Modi.
• It was launched to reduce the demand for physical gold and with an aim to invest a part of these physicals gold bars and coins that are purchased every year into financial savings in the form of gold bonds.
• Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity.
• The Bond is issued by Reserve Bank on behalf of Government of India.
• Government introduced these bonds to help reduce India’s over dependence on gold imports.
• The move was also aimed at changing the habits of Indians from saving in physical form of gold to a paper form with Sovereign backing.
• The bonds will be restricted for sale to resident Indian entities, including individuals, Hindu Undivided Family (HUFs), trusts, universities and charitable institutions.
• The bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.
• The tenor will be for a period of 8 years with exit option from the 5th year to be exercised on the interest payment dates.
• The minimum permissible investment limit will be 1 gram of gold, while the maximum limit will be 4 kg for individual, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal (April-March) notified by the government from time to time.
• In case of joint holding, the investment limit of 4 kg will be applied to the first applicant only.
• Bonds can be used as collateral for loans.
• The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.

Benefits of Soverign Gold Bond

• As a low-risk investment, it is perfect for investors with low-risk appetite.
• Compared to physical gold, the cost to purchase or sell SGBs is quite low.
• The expense of buying or selling the SGB is also nominal in comparison to the physical gold.
• The gold bonds can be availed either in paper or in demat form as per the convenience of an individual.
• The gold bonds invested by the Investors can be gifted or transferred to others who are eligible under the scheme.
• They can also trade these bonds on stock exchanges subject to notifications of the Reserve Bank of India.
• These Gold bonds can be purchased through multiple payment modes such as cheques, cash, DDs or electronic transfer.

One District, One Product

Why in News?
The government reiterated that it is working towards ‘One District One Product’ which will give impetus to the Handicraft sector as well as the Artisans.

About One District, One Product

• The ODOP initiative is aimed at manifesting the vision of the Hon’ble Prime Minister of India to foster balanced regional development across all districts of the country.
• The idea is to select, brand, and promote One Product from each District of the country
  • For enabling holistic socioeconomic growth across all regions
  • To attract investment in the District to boost manufacturing and exports
  • To generate employment in the District
  • To provide ecosystem for Innovation/ use of Technology at District level to make them competitive with domestic as well as International market

Objectives of the scheme

• Preservation and development of local crafts / skills and promotion of the art.
• Increase in the incomes and local employment (resulting in decline in migration for employment).
• Improvement in product quality and skill development.
• Transforming the products in an artistic way (through packaging, branding)
• To connect the production with tourism (Live demo and sales outlet – gifts and souvenir)
• To resolve the issues of economic difference and regional imbalance
• To take the concept of ODOP to national and international level after successful implementation at State level.