What is/are the purpose/purposes of Government’s ‘Sovereign Gold Bond Scheme’ and ‘Gold Monetization Scheme’? 1. To bring the idle gold lying with Indian households into the economy 2. To promote FDI in the gold and jewellery sector 3. To reduce India’s dependence on gold imports Select the correct answer using the codes given below:

The correct answer is C, that is statements 1 and 3 only.

Both schemes were launched in November 2015 to tackle India's large household gold stock and its heavy gold import bill. The Gold Monetisation Scheme lets households, temples and trusts deposit idle gold with banks, which then lend it out, so dormant gold enters the economy (statement 1). The Sovereign Gold Bond Scheme replaces physical gold purchases with government-backed bonds denominated in grams of gold, which cuts demand for imported bullion (statement 3).

• Statement 2 is wrong. Neither scheme is designed to attract FDI into gold and jewellery. FDI in gold trading is governed separately by the consolidated FDI policy and is not a purpose of these two schemes.

Core concept: import substitution and mobilising domestic savings in gold. This links to the current account deficit and external sector management in the economy syllabus, and to the Mains theme of household savings and financial inclusion.

Both schemes have been revised since 2016, so check their current status before relying on the exact terms.

Trap: Candidates often pick D because they assume any gold-sector policy must involve foreign investment. Look at what each scheme actually does.