New Rays of Hope from India’s New Government

Narendra ModiA jubilant mood has been prevailing all over India’s gems & jewellery industry since the results of 16th Lok Sabha (Lower House of the Indian Parliament) were declared on 16th May, 2014. “It feels as if our dark days are over and we can see some new rays of hope from the new government… We feel relieved as if somebody has subtracted a severe punishment inflicted on the industry by the previous government,” say the industry circles here.

It was, as expected and predicted, a landslide election victory for Mr. Narendra Modi’s Bharatiya Janata Party (BJP) which has won 282 out of 543 seats securing a clear mandate for Mr. Modi to rule over the world’s largest democracy for the next five years. No political party in India has bagged a clear majority since 1984. The BJP has done it after 30 years.

Moreover, the Indian National Congress (INC) led by Mrs. Sonia Gandhi has tasted the worst defeat in its history by securing just 44 seats (not even one tenth of 543) and most of the ministers of the previous United Party Alliance (UPA) government led by the INC have lost their seats in the recent general elections. This shows how furious and fed up people of India were with the previous government’s poor performance marred with its whimsical policies and corruptions worth thousands of crores of rupees.

Although Mr. Modi has fulfilled his role as a lead-campaigner of the elections successfully, his task as the Prime Minister (PM) of India is not easy as he has inherited a very weak economy from the out-going government. India’s newly elected government will have to repair the economy which is growing at its weakest rate since the 1980s and control the stubbornly high inflation.

India’s gems & jewellery industry is one of the most adversely affected sectors which requires immediate policy related booster doses for its fast recovery. Right from the beginning of the election process here, the industry people, fed up with the previous government’s ‘discouraging’ policies, have supported BJP whole-heartedly and now they are banking upon the new government led by Mr. Modi to get some immediate relaxations on gold import policies.

In fact Mr. Modi is said to have promised the industry people to address their grievances within three months if his party comes to power. Now with the BJP winning the elections and Mr. Modi becoming the PM, his government is expected to give its interim budget within three months and at that time he is also expected to fulfill his promises given to India’s gems & jewellery sector.

Mr. Haresh Soni, Chairman of All India Gems & Jewellery Trade Federation (GJF) says, “We hope that Mr. Narendra Modi would fulfill the promises he has made to the industry. He has promised to review the policies especially related to gold import duty and give some relaxations. Once this is sorted out, the raw materials would be easily available. We are hopeful that he would take up this issue positively in his interim budget to be introduced soon.”

The industry leaders also want the new government to withdraw the troublesome 80:20 rule which has resulted in short-supply of gold in the market. They feel that once the industry achieves higher growth-rate, ultimately the Current Account Deficit (CAD) is sure to narrow down.

The movement of shifting of Mumbai based diamond bourse to Surat is also expected to get momentum with Mr. Modi becoming the PM. Lack of an international airport at Surat was one of the hurdles in shifting the base but the industry people now expect to get all infrastructures necessary for the purpose.

Mr. Narendra Modi is known for his vision, hard work, discipline, efficient governance and commitment. So the people of India are having high aspirations from this man to provide the leadership that can lead the country to an era of high growth and good governance.

Posted by Suresh Chotai