The Indian Reserve Bank’s Gold Plan ‘Sovereign Gold Bond Scheme’ has been closed. Due to the huge rise in gold prices in the last few years, it was difficult for the government to continue the scheme.
Rajya Sabha MP Rajni Ashokrao Patil asked the government about Sovereign Gold Bonds, whether the government is starting a new series of Sovereign Gold Bond Scheme again? When will the government announce the next installment for the public for the public?
Responding to this question, the finance ministry says that the SGB scheme was launched in 2015 to reduce the demand for physical gold. As of March 31, 2025, under the scheme, equal 146.96 tonnes of gold bonds were subscribed, with a total cost of around Rs. 72,275 crore. These subscriptions were collected by 67 different installments, of which 18.81 tonnes of SGB have been redeemed by June 15, 2025.
It may be recalled that the Sovereign Gold Bond Scheme was launched in 2015 with the aim of promoting digital gold. In this scheme, the government gave investors the opportunity to buy gold at a cheaper price. According to the RBI website, its maturity was 8 years and the SGB had a fixed interest of 2.5%.
The government said that the Government of India meets its funding needs through various means such as government securities, treasury bills and sovereign gold bonds. Now a decision on which means to raise funds will be made in view of the cost and situation. Gold prices have increased significantly due to the recent global tensions, making it expensive to get a loan through SGB. The government is trying to keep the loan at least.
The finance ministry has clarified that they will decide to issue the next installment of SGB by adopting ‘Prudent Debt Management Strategy’. This means that the government will not resume the plan without thinking. However, it will be seen how much the government borrowed cost is increasing. Union Minister of State for Finance Pankaj Chowdhury said in Parliament that the government was trying to reduce the cost of borrowing.
He further said that it is very important to keep in mind the cost of debt when considering issuing a new SGB installment. As you can tell, the last series of Sovereign Gold Bond (Series IV 2023-24) was issued in February 2024. Since then, gold prices have risen by more than 70%.
The Finance Minister cited the World Gold Council’s ‘Gold Investment Market and Financialization’ report, saying that Indian homes and religious organizations have about 23,000 to 25,000 tonnes of gold, priced at about $ 1.4 trillion. Currently, giving priority to debt costs, the government will take a careful decision on SGB’s upcoming installment. Investors have made strong profit at rising gold prices.
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