PM Modi assures Gold Moneisation Scheme will be ready ahead of festive season

New Delhi(Reuters):A programme to attract gold owned by households into a bank deposit scheme to monetise the precious metal could be ready in weeks, Prime Minister Narendra Modi said on Sunday, a step aimed to cut expensive imports.

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The scheme would allow people to put their gold into banks in return for interest payments in an attempt to mobilise thousands of tonnes of the metal sitting idle in Indian households.

Indians prize gold as gifts and as a way of storing wealth. The country consumes nearly 1,000 tonnes of gold every year, most of it imported, and gold is the second-biggest expense on the import bill after oil.

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In his monthly radio address, Modi said the programme should be ready before Dhanteras next month, a festival when it is considered an auspicious period to buy gold.

“Please, don’t let your gold be dead money,” Modi said. “Gold is very important for the country. Gold can become an economic strength for us.”

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Huge gold imports were blamed for pushing the country’s current account deficit to a record $190 billion (Rs 1.23 lakh crore) in 2013, prompting the government to hike its duty on imports to 10%, an all-time high.