All eyes were on India's Finance Minister P Chidambaram on
Monday as he was set to make his budget presentation. Though it was an interim
one since the Lok Sabha elections are fast approaching, stake holders in gold
and jewellery industry were expecting some announcements from him, especially
after an instruction from Congress president and UPA chairperson Sonia Gandhi
to Chidambaram to ease curbs on gold imports, following which he too assured
that the restrictions would be relaxed soon.
As expected, the Harvard-educated Chidambaram, who hails
from the southern state of Tamil Nadu, spoke about gold. He said the government
was looking into the pros and cons of easing controls on gold imports, but
would not let the current account deficit balloon again.
Chidambaram predicted the current account deficit would be
contained at $45 billion at the end of March, around half the level at the
start of the fiscal year, thanks largely to tight restrictions on gold imports
and a recovery in exports.
Since this announcement from Chidambaram was almost like
maintaining status quo on the curbs, the industry is left disappointed. Gold rate today in Chennai too is largely unchanged.
The All India Gems and Jewellery Trade Federation (GJF) has
expressed deep disappointment and shock at the Interim Budget.
The GJF, which is the national trade federation for the
promotion and growth of trade in Gems and Jewellery (G&J) Industry across
India, is disappointed at "proposals that are anti jewellery sector,
depriving livelihood of millions of people engaged in the sector."
Haresh Soni, Chairman, GJF said, "It is anti-people
budget impacting over three crores people as the Finance Minister ignores the
plight of jewellery artisans and craftsmen. The entire Gems & Jewellery
Industry is deeply disappointed and shocked at the insensitive treatment meted
out to it by the Government."
He further said: "The Government seems to be inconsiderate
to the plight of lakhs of families of goldsmiths and craftsmen, who are
suffering due to lack of job work and thereby threatening their livelihood. The
Government is also turning a blind eye to the increasing instances of gold
smuggling that is not only creating a parallel economy but also threatening the
security of the country due to rise in anti-social activities”, Soni said.
"Even GJF's suggestions to control CAD thrown out of
window as it demanded that the 80:20 must be withdrawn and duty must be brought
down to 2%. Government now should roll back the restricted policy as the
Current Account Deficit has reduced substantially. Such policy reversal would
also curve the growing black marketing activities in the trade.”
GJF has reiterated that the Government’s recent policies
such as 80:20 scheme has resulted in high premium and monopolized business
environment, destroying the organized G&J industry as well as lead to
unemployment and starvation amongst the workforce.
GJF said that the Government should recognize people’s
sentiments to consider gold jewellery as the best social security and also
preserve the centuries old jewellery design legacy of India. If India’s
artisans, craftsmen and goldsmiths don’t survive, then the country’s centuries
old heritage of jewellery making will die a natural death and will be lost
forever.
“We urge the Government to keep import duties on gold low to
eliminate smuggling; and immediately remove the 80:20 Rule while allowing
consignment gold imports to ensure fair open market controlled business. We
urge the Government to keep import duties on ready finished imports moderately
high to protect Indian industry, still not banning imports. Competition from
overseas is important for keeping domestic jewellery manufacturing industry
competitive in design and quality."
Those tracking and monitoring gold rate today in Chennai
have expressed shock over the budget. "We were expecting some good
announcements, especially on the removal of curbs. But we are disappointed. At
least we now expect some genuine promises in the manifestos of political
parties," experts tracking gold rate today in Chennai said.
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