CONTENTS

  1. SOVEREIGN GOLD BOND SCHEME
  2. AMENDED TECHNOLOGY UP-GRADATION FUND SCHEME

 


 

SOVEREIGN GOLD BOND SCHEME

Focus: GS III- Indian Economy

 Why in News?

Sovereign Gold Bond Scheme 2021-22 (Series VII) – Issue Price.

  • The issue price of the Bond during the subscription period shall be  4,765 (Rupees Four thousand Seven hundred sixty five only) – per gram, as also published by RBI.

About Sovereign Gold Bond Scheme (SGB)

  • The Sovereign Gold Bond Scheme was introduced in the Union Budget 2015-16.
  • 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 Sovereign 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.
 

AMENDED TECHNOLOGY UP-GRADATION FUND SCHEME

Focus: GS III- Indian Economy

Why in News?

Union Minister of Textiles reviewed the Amended Technology Up-gradation fund Scheme (ATUFS) with the different Ministries, Departments ,Textiles Industry Associations and Banks etc at the 5th Inter Ministerial Steering  Committee  (IMSC) meeting organized by the Ministry of Textiles.

  • They reviewed the Amended Technology Upgradation Fund Scheme to boost the Indian Textile Industry by enabling ease of doing business, bolstering exports & fuelling employment.

 About Amended Technology Up-gradation fund Scheme (ATUFS) :

  • Ministry of Textiles had introduced Technology Upgradation Fund Scheme (TUFS) in 1999 as a credit linked subsidy scheme intended for modernization and technology up-gradation of the Indian textile industry, promoting ease of doing business, generating employment and promoting exports. Since then, the scheme has been implemented in different versions.
  • The Ministry of Textiles has introduced the Amended Technology Upgradation Fund Scheme (ATUFS) starting from Jan 2016, for a period of seven years.
  • Under ATUFS, there is a provision of a one-time capital subsidy for eligible benchmarked machinery at the rate of 15% for garments.
  • The ATUFS replaces the existing Revised Restructured Technology Upgradation Fund Scheme (RR-TUFS) to give a boost to the textile sector under the Make in India campaign.
  • The scheme is being administered with a two stage monitoring mechanism by Technical Advisory-cum-Monitoring Committee (TAMC) and Inter-Ministerial Steering Committee (IMSC). 
  • ATUFS is implemented through web based platform, iTUFS.
  • The amended scheme would give a boost to ‘Make in India’ in the textiles sector
  • It is expected to attract investment to the tune of one lakh crore rupees, and create over 30 lakh jobs
 The scheme specifically targets:
  • Employment generation and export by encouraging the apparel and garment industry, which will provide employment to women in particular and increase India’s share in global exports.
  • Promotion of Technical Textiles, a sunrise sector, for export and employment
  • Promoting conversion of existing looms to better technology looms for improvement in quality and productivity
  • Encouraging better quality in the processing industry and checking the need for import of fabrics by the garment sector.

 

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