The government will introduce gold deposit accounts to utilise the 20000 tonnes of gold available within the country and launch a sovereign bond as an alternative to buying the metal, moves that are likely to cut imports into the biggest gold consumer.

Finance Minister Arun Jaitley however did not make any mention of cutting the 10 percent import duty in his speech on Saturday unveiling the budget for the next fiscal year starting April 1.

About 800-1000 tonnes of gold is shipped in every year despite massive stocks in the country that is neither traded nor monetised, Jaitley said.

"Stocks of gold in India are estimated to be over 20000 tonne but mostly this gold is neither traded, nor monetised. The Gold Monetisation Scheme will replace both the present Gold Deposit and Gold metal Loan Schemes. The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account. Banks and other dealers will also be able to monetise this gold," the finance minister said, without setting a timeline for the launch of the scheme.