New Delhi, May 11 -- India's jewellery industry has called on the government to introduce a comprehensive gold monetisation scheme to channel idle household gold into the economy, instead of discouraging citizens from buying the precious metal.

The demand comes after Prime Minister Narendra Modi appealed to citizens to avoid purchasing gold for at least one year in a bid to reduce foreign exchange outflows and contain the widening current account deficit. The appeal has coincided with record-high domestic gold prices, intensifying concerns within the jewellery sector.

Industry representatives warned that any abrupt decline in gold purchases could severely impact millions of artisans, traders, and workers dependent on the jewellery ecosy...