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Centre may halt Sovereign Gold Bonds issuance from FY26 to reduce govt debt


Published on 2024-12-08 13:20:46 - Business Standard
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  • government's fiscal burden. Now that the government has decided to sustainably bring down the debt-to-GDP ratio from FY27, there is no reason why such a scheme should be continued. It has also outlived its initial purpose of reducing physical gold imports," a senior government official said,

The Indian government is considering halting the issuance of Sovereign Gold Bonds (SGBs) from FY26 as part of a strategy to manage and reduce government debt. This decision comes in light of the significant amount of gold bonds already issued, which has led to a substantial liability for the government. The SGB scheme, launched in November 2015, was designed to reduce the demand for physical gold and channel domestic savings into financial assets. However, with the bonds maturing over the next few years, the government faces redemption pressures. The move to pause new issuances aims to control the rising debt levels and manage fiscal responsibilities more effectively, although no final decision has been made yet.

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