NEW DELHI: Prime Minister Narendra Modi on Thursday unveiled three schemes that seek to dampen physical demand for gold and tap into an estimated 20,000 tonnes of the precious metal lying idle with Indian households and institutions.The Gold Monetisation Scheme (GMS), 2015 will offer an option to resident Indians to deposit their precious metal and earn an interest of up to 2.5%, while under the Sovereign Gold Bond scheme, investors will be able to earn 2.75% interest per annum by buying paper gold.The Prime Minister also unveiled the first gold coin minted in India, bearing national emblem Ashok Chakra on one side and Mahatma Gandhi ’s image engraved on the other side.Initially the coins will be available in denominations of 5 grams and 10 gm. A 20 gm gold bar will also be available through 125 MMTC outlets across the country. Speaking on the occasion, Modi said India has surpassed China as the world’s largest gold consumer, buying 562 tonnes of yellow metal so far this year, compared to China’s 548 tonnes.“People should take advantage of the golden opportunity to help India march to a golden period,” Modi said.The Prime Minister said there is no reason for a country with so much gold lying idle to remain poor. With some efforts and right policies India can get rid of this tag (of a poor nation), he said. Recalling India’s tradition of saving and culture of empowering women with gold, he said in a lighter vein that even the Reserve Bank of India Governor Raghuram Rajan will have to recognise the difference between “arthashastra (economics) and grahshastra (home economics)”.While the gold monetisation scheme aims to bring out the country’s stored gold, the gold bond scheme will give investors returns they would get from buying gold. Together, the government hopes, the two schemes should dampen demand for gold.India currently imports about 1,000 tonnes of gold every year, leading to outflow of foreign exchange and pressure on the current account. Total gold imports into the country added up to $34 billion in 2014-15. With regard to gold bonds, the RBI in consultation with the Centre has decided to issue such instruments carrying an annual interest rate of 2.75%. Applications for the bonds will be accepted from November 5-20 and bonds will be issued on November 26.These bonds will be sold through banks and designated post offices. The borrowing through issuance of such bonds will form part of the government’s market borrowing programme. The gold bond scheme, aimed at providing an alternative to buying physical gold, will offer investors a choice to buy bonds worth 2 gm of gold, up to a maximum of 500 gm.This is the first tranche of the gold bond scheme and subsequent tranches will be notified later. The tenor of the bond will be for a period of eight years, with exit option from fifth year to be exercised on the interest payment dates. “These schemes will be transformative for the Indian gold industry.However, the expectations from the schemes in the short term must be tempered as it will take time to build the infrastructure and products and for customer acceptance to grow,” said Somasundaram PR, managing director-India at World Gold Council. The Sovereign Gold Bond scheme offers a host of benefits including additional interest of 2.75% per annum on the initial purchase price, said Nitin Chugh, head of digital banking at HDFC Bank. Yes Bank also launched the Sovereign Gold Bond scheme at its major branches across the country and is in the process of fine-tuning its launch of the Gold Monetisation Scheme.