The Indian government is considering discontinuing the Sovereign Gold Bond (SGB) scheme from the 2025-26 fiscal year to reduce its financial burden. The scheme is reportedly deviating from its intended purpose and increasing the government's debt
Gold is considered a good investment option in India. Many people invest in gold for safety. Hence, the price of gold is constantly increasing. It was in this context that the Central Government introduced the Gold Bond Scheme in 2015
Buying gold through digital gold bonds was considered a safe method. Also, at the end of the maturity period of this scheme, the government will return the investment for the gold bond along with interest. This scheme was brought with the aim of shifting retail investors from physical gold to digital gold
A senior central government official, speaking about this, said that the scheme "has exceeded its purpose" and is increasing the government's financial burden. It is the government's duty to repay the gold bond investors the equivalent value of gold at maturity
Finance Minister Nirmala Sitharaman is expected to make an announcement regarding the debt reduction strategy in next year's budget. It aims to reduce the fiscal deficit to below 4.5 percent in FY26 and the debt-to-GDP ratio in FY27
The total issuance under the gold bond scheme was ₹45,243 crore with outstanding dues of ₹4.5 trillion by March 2023. To reduce its financial burden, RBI announced the early redemption of bonds issued between May 2017 and March 2020
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