- SOVEREIGN GOLD BOND SCHEME
- 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.