The third edition of the Sovereign Gold Bond (SGB) scheme, a component of the government's market borrowing programme, received a poorer response than the last round, getting a subscription of 1,128 kg gold, amounting to Rs.329 crore, an official statement said on Friday.
More than 64,000 applications have been received in the third round, but the actual figure may vary as comprehensive information from all the authorised receiving agencies is under compilation, said the finance ministry statement.
"Trend during the third tranche of SGB shows that the scheme is gradually picking-up amongst the investors with increase in awareness and more clarity about the provisions of the scheme," the statement added.
These bonds, being sold through banks, the Stock Holding Corporation of India Ltd. (SHCIL) and designated post offices, will be issued on March 29.
The government received subscriptions of Rs.726 crore for 2,790 kg gold under the second tranche of the scheme in January, while the first tranche of sovereign gold bonds launched in November had received a subscription for 915.95 kg of gold worth Rs.246 crore.
The gold bonds are issued in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of 5-7 years with a rate of interest to be calculated on the metal's value at the time of investment. The scheme has an annual ceiling of 500 grams per person.
Prime Minister Narendra Modi had last November launched the gold scheme aimed at reducing demand for the metal in physical form by encouraging people to buy gold in the demat or paper form.
India's gold imports increased to $26.45 billion during the April-December period of the current fiscal, as compared to the $25.85 billion worth imported in the same period of last year.
In Budget 2016-17, Finance Minister Arun Jaitley has proposed that redemption of these gold bonds be exempt from capital gains tax, as also that long-term capital gains arising on their transfer be eligible for indexation benefits.
