Can Budget 2026 Harness Household Gold to Boost Economic Growth?

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Can Budget 2026 Harness Household Gold to Boost Economic Growth?

India has significant household gold reserves, much of which remains untapped for economic purposes. With Budget 2026 approaching, experts see an opportunity for the government to channel this idle wealth into a catalyst for economic growth.

Published by Somesh | January 15, 2026

Budget 2026: Unlocking India’s Household Gold for Economic Growth

As India advances toward its long-term vision ofViksit Bharat 2047, industry leaders in the gold and financial services sectors are urging the government to rethink how household gold is leveraged in the economy. India remains one of the world’s largest holders of household gold, much of which stays locked away in homes and lockers, limiting its economic potential.

Digital Gold: Key to Unlocking Idle Wealth

Mahendra Luniya, Chairman of Vighnharata Gold Ltd., emphasizes the role ofdigital goldin integrating idle household savings into the formal economy. “To achieve Viksit Bharat 2047, India must unlock the vast amount of gold lying idle in households and use it productively in the digital economy,” he says.

Luniya notes that converting physical gold into digital form could accelerate economic growth and help India reach aUSD 5 trillion economy, potentially achieving the Viksit Bharat goal ahead of schedule.

Rising Gold Prices Shift Consumer Behavior

With gold prices nearingRs 1.5 lakh per tola, traditional jewellery purchases have slowed. Consumers are increasingly buying smaller quantities or storing gold at home purely as an investment, effectively locking liquidity within private vaults. Digital gold provides a practical alternative that preserves cultural attachment while mobilizing funds for productive use.

Sovereign Gold Bonds: A Call for Reintroduction

Luniya also advocates for the reintroduction ofSovereign Gold Bonds (SGBs), which previously encouraged public participation, increased awareness, and allowed the government to access household gold capital productively without financial loss.

Gold Loans: Supporting Financial Inclusion

Umesh Mohanan, ED & CEO of Indel Money, highlights the importance ofgold loansas emergency credit for small traders, farmers, and micro-entrepreneurs. Despite being a safe and productive source of funds, gold loans lack favourable tax treatment, with borrowers paying18% GST on processing fees, prepayment charges, and loan extensions, even though interest payments are exempt.

Gold loans are crucial for financial inclusion, particularly for rural households and MSMEs, and are often used for agriculture, education, housing, or medical emergencies. The organised gold loan market, currently aroundRs 12 lakh crore(March 2025), is expected to grow toRs 18 lakh crore by FY27, reflecting the sector’s vast potential.

Policy Expectations for Budget 2026

AsUnion Budget 2026approaches, industry leaders hope for targeted measures that:

Promotedigital gold adoption
ReintroduceSovereign Gold Bonds
Providefavourable tax treatmentfor gold loans

Such initiatives could help bring household gold into the mainstream economy, strengthen the financial system, and advance India’s long-term development goals.