An Analytical Inquiry Of Sovereign Gold Bond Scheme In India: Policy Ingenuity Or Legislative Paradox?
- IJLLR Journal
- Oct 21, 2025
- 1 min read
Tanuj Goyal & Sulagna Khan, Symbiosis Law School, Pune
ABSTRACT
Sovereign Gold Bond or SGB Scheme as crafted by India was a financial initiative known for its substantial ingenuity and was demarcated as an ambitious approach to combine macroeconomic solidity along with individual wealth generation through offering of sovereign-secured and interest-generating gold investment mechanisms. Regardless of the inherent positive elements of SGBs in the form of capital gains tax exemption upon maturity, predetermined 2.5% annual interest and absolute dematerialization, SGBs operational complexity coupled with irregular issuance of tranches and excessively increasing redemption liabilities resulted in the abrupt termination in FY 2024-25.
This paper critically unfolds the SGB trajectory, uncovering the evolution from commencement to termination with a specific focus on the associated volatility and fiscal restraints revealed in FY 2023-24. Furthermore, it draws a comparative takeaways from global gold-related instruments including Turkey’s Gold Bonds and China’s Gold Accumulation Plans (GAPs) exhibiting the series of operations lessons that India could have incorporated for the sustenance of the SGB Scheme. The paper also tends to explore the viable post-SGB solutions including Gold ETFs and Digital Gold coupled with tangible resource tactics laying emphasis upon the essence of a hybrid initiative in wealth preservation and avoidance of substantial policy risks.
Keywords: Ingenuity, Interest-generating, Capital gains tax exemption, Dematerialization, Hybrid Initiative
