Trade Expresses Mixed Reactions to India’s Budget

Pramod Agarwal

Mumbai: India’s Finance Minister Mr. Arun Jaitley yesterday presented the nation’s annual budget in the parliament. Various trade bodies of the gem & jewellery industry have sent their reactions which we put here in compilation:

GJEPC: The newly elected Chairman of Gem & Jewellery Promotion Council (GJEPC) Mr. Pramod Agarwal said, “We welcome the Government’s development oriented Budget that will spur the India consumption story and create more employment opportunities. We are disappointed with the increase in customs duty of cut and polished Diamonds and cut and polished coloured gemstones  from 2.5% to 5%, as it was not included as part of the industry’s recommendations to the Government. This move hampers India’s chances of becoming an international diamond trading hub. This move doesn’t provide India a level playing field vis-à-vis other peers such as Belgium, Dubai and Israel. It will also have a negative impact on the Shut Out business from the US, which has been a fast growing segment.

Union Finance Minister mentioned in his Budget speech that exports will grow by 15% in FY18 and the Government is planning to enhance export growth, but we are awaiting clarity on the specific roadmap for achieving this growth. We welcome the Government’s initiative to formulate a comprehensive Gold Policy to develop gold as an asset class subsequent to the GJEPC’s Gold Summit held in the Capital in December 2017. This will assure a new era of development for the gold market and exports in the sector. We shall continue to seek a reduction in basic import duty on Gold, Silver and Precious Metals and hope that it will be considered as part of the Gold Policy announcement. It is good that the Government will also establish a system of consumer friendly   and   trade   efficient   system   of   regulated   gold   exchanges   in   the   country.  Gold Monetization  Scheme  will  be  revamped  to  enable  people  to  open  a  hassle free  Gold  Deposit Account.

The proposal to cut corporate tax of companies with annual revenues of upto Rs. 250 crore to 25% will benefit the gems and jewellery sector but this measure should be also made applicable to all gems & jewellery exporters. The cut in corporate tax will result in more investments and job creation.

We welcome the Government’s move to contribute 12% to Employee Provident Fund (EPF) in wages of new employment for three years in all sectors.

The Government’s emphasis on education and skill enhancement should be extended to creating more institutes for the gems and jewellery sector.

We welcome the schemes and increased outlay for MSMEs as well as the initiative to create a database and identity for MSMEs. We welcome the Government’s move to incentivise domestic value addition and Make in India in the gems & jewellery sector in addition to others. The benefits extended to leather, textile and footwear businesses should be extended to the gems & jewellery sector also as it is a job-intensive industry.

In sync with the Government’s emphasis on manufacturing and creating infrastructure, more jewellery parks with shared support services and resources can be created to stimulate job creation as mentioned in the Economic Survey. The Finance Minister announced that the Department of Commerce will be developing a National Logistics Portal as a single window online market place to link all stakeholders.”

GJF: Finance Minister’s announcement about government to soon come-up with a gold monetization scheme is a victorious decision for the gems and jewellery sector, said, Mr Nitin Khandelwal, Chairman, All India Gems and Jewellery Trade Federation (GJF) commenting on the budget. However, Mr Khandelwal said, the gems and jewellery sector was expecting a cut in import duty of gold in the new fiscal year, but the industry is confident that sooner or later government will acknowledge this.

GJF welcome’s the budget and feels the budget will help boost the gems and jewellery sector.

Mr Khandelwal said, “The government has made excellent reforms for agriculture and rural sector which is one of the highest contributors to the GDP of our country. These reforms will empower rural consumer through improved earnings. This will in turn help the jewellery sales in rural sector. The proposed Comprehensive Gold Policy, Gold spot exchange and Gold deposit account will be very beneficial for the Industry. We also welcome the reduction in corporate tax to 25% for companies with turnover of over 250 crores.”

Mr Sreedhar GV, Director and Past Chairman, GJF, said, “It is a welcome budget for the entire gems and jewellery sector. Government has been very assertive on the demands from the jewellery sector and have heard our voices. Gold monetization scheme was a request which the industry demanded and we are happy that government will soon have a revamp the existing gold monetization scheme.”

WGC: Somasundaram PR, Managing Director, India, World Gold Council (WGC) said, “The government’s announcement that it will formulate a comprehensive gold policy to establish gold as an asset class is ground-breaking. The establishment of regulated gold exchanges is exceptionally positive towards making gold a mainstream national value-added asset. A stable policy environment and a fair and effective trading market will bring much needed transparency and stability.”

IBJA: Mr. Saurabh Gadgil, Chairman & Managing Director, P.N. Gadgil Jewellers and National Vice President, Indian Bullion and Jewellers Association (IBJA} said, “The Union Budget FY 18-19 seems to be in the right direction, it is indeed a very welcoming budget by the finance ministry, it lends focused plans of development and upliftment for the agricultural sector. This will give a boost and strengthen agriculture, which is the backbone of our economy, this will have a direct proportional effect on the gems and jewellery industry. This budget has given a clear indication that the ministry feels it is time to clean and organize the gems and jewellery industry by introducing the best practices proposed by Indian Bullion and Jewellers Association. The budget has announced to make provisions for Gold Spot exchange, Gold Deposit account, restructure of Gold Monetization Scheme, and a comprehensive Mines to Market gold policy. Furthermore, the government has welcomed digital payments and has furthered the initiative with Aadhar based cashless payments. The Gems and Jewellery industry was deeply stung by multiple issue in past years, this budget has many positives. We are hoping this budget will bring about the required confidence in the economy and benefit the industry in the long run.”